Bloomberg Intelligence senior strategist Mike McGlone is sounding a cautionary note on Bitcoin's future performance, particularly when measured against gold, suggesting a significant reassessment of its value might be on the horizon. His analysis delves beyond dollar valuations, focusing on a less-discussed metric that could signal deeper market shifts.
Bitcoin's Value Against Gold: A Looming Correction?
McGlone highlights the "Bitcoin-gold cross" metric, which indicates how much gold one Bitcoin can purchase. As of December 22, this ratio sat near 20x, a level he deems precarious. The strategist suggests a higher probability of this ratio dropping to 10x rather than rising to 30x by 2026. Such a decline would effectively halve Bitcoin's purchasing power relative to gold, even if its U.S. dollar price doesn't appear as dramatically affected. He views this ratio as an early warning indicator, often pressured when recession risks escalate.
Broader Market Correlation and Future Outlook
Further reinforcing his perspective, McGlone points out the strong correlation (around 0.5376) between the Bitcoin-gold ratio, the S&P 500, and market volatility. This suggests that Bitcoin remains very much a "risk-on, risk-off" asset, moving in tandem with broader market sentiment and economic health. Projecting ahead to 2026, McGlone sketches a potential scenario for market resets: core CPI easing to 1%, oil near $40, gasoline at $2, and Bitcoin stabilizing around $50,000. He emphasizes that these are not exact predictions but rather cycle-level prices that tend to emerge when U.S. stocks experience sustained downturns, signifying a significant market recalibration.
