Bitcoin is currently in transition, making it the best asset for risk management in recent years. Senior Commodity Strategist for Bloomberg Intelligence, Mike McGlone, said in a recent interview with Kitco News’ “On The Spot”.
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Although this is a painful process that crypto investors are able to confirm, it could lead the benchmark cryptocurrency to new heights. The Bitcoin price has fallen from its record high of $69,000 in the last 6 months to around $30,000.
Bitcoin has spent 9 weeks consecutively in red, a sign of the severity of the current macroeconomic outlook. McGlone thinks that the crypto-currency and risk-on assets have responded to the macroeconomic outlook.
Crypto market is enjoying some of the highest performance global markets. The rallies in this new asset class correspond to 4-year cycles that include parabolic bull runs and multi-year bear market.
Many in the sector believe cryptocurrencies entered their bear phase or the “Crypto Winter”. Two factors have contributed to the losses: The U.S. Federal Reserve’s beginning of tightening economic measures and the fall of Terra.
McGlone said that Bitcoin and other cryptocurrency must suffer the greatest losses because they have the highest gains. This process is called “Mean Reversion” when an asset trends in a direction and then reverses to a “mean” price or bottom.
On the latter, the Senior Commodity Strategist said it’s “hard” to calculate an exact price bottom. Bitcoin has been moving in tandem with the Nasdaq 100, and both recently hit their 100-week moving average when BTC’s price dropped to $30,000.
McGlone claims the trends seem to hit at further losses, but Bitcoin should “come out ahead”. This potential rally will be driven by “institutional bids”, as BTC continues to be adopted by worldwide institutions, and because of the cryptocurrency’s “inelastic supply”.
How much will Bitcoin cost to reach $100K?
McGlone says that only a few investment companies have BTC in their portfolio, despite its rapid growth. This could change in the coming years, as Bitcoin becomes “global collateral” and begins a new ascent towards $100,000 by 2024.
On BTC’s price future outlook and potential bottom, McGlone added:
Bitcoin is an excellent support pivot at $30,000, according to my opinion. The equity must continue to fall for the currency to move lower. But what I sense it’s (BTC) pumping into good support and I fully expect, it could get to $20,000 but I doubt it does, within the next two years it’s going to get back to and get to $100,000.
Some of the most important projects in crypto may find the current downtrend a positive thing. This will reduce speculative investments and allow for projects that have solid fundamentals.
This could allow these projects to keep market share in traditional markets. According to the expert, crypto markets accounted for 0.5% of global equity market capital. Now it’s around 1%.
McGlone predicts that Bitcoin and Gold are the two best investments to have in the future, especially as the economy goes deflationary and equity prices fall. The precious metal may lose market share to crypto number 1.
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At the time of writing, BTC’s price trades at $29,700 with sideways movement in the last 24-hours.
