Mike McGlone, the Senior Commodity Strategist at Bloomberg Intelligence, has made a projection for 2024, foreseeing that gold will surpass Bitcoin in performance. This comes despite positive outlooks related to the recent approval of a Bitcoin exchange-traded fund (ETF) and the upcoming Bitcoin halving. However, McGlone believes that certain macroeconomic factors could potentially curtail the growth prospects of Bitcoin, the largest cryptocurrency.
One aspect McGlone highlights is the misguided market expectations surrounding the Federal Reserve's interest rate policy. Typically, rate reductions by the Federal Reserve tend to support higher-risk assets, including Bitcoin.
However, he argues that prevailing macroeconomic conditions indicate a potential departure from this trend. In an interview with Cointelegraph, McGlone asserts that the Federal Reserve might face difficulties in implementing an easy policy shift, primarily due to inflation resulting from excessive monetary policy easing in the past.
According to McGlone, "The Fed won't yield as easily as it has in the past, due to the inflation it induced through excessive monetary policy easing."
The potential forecast of a recession in the United States' economy could adversely affect the stock market, subsequently influencing the price of Bitcoin. McGlone points out that in times of stock market decline, Bitcoin tends to experience even sharper declines.
In such circumstances, traditional safe-haven assets like gold and long-term Treasury bonds may emerge as safer investment options, providing stability amid financial uncertainty.
The distinction in the behavioral patterns of gold and Bitcoin within this macroeconomic context holds significant importance. Gold, regarded as a conventional store of value, might exhibit more resilience in the face of market uncertainties compared to Bitcoin. McGlone suggests that in 2024, investors may lean towards more stable assets such as gold, particularly when confronted with heightened market and macroeconomic risks.
McGlone underscores the pivotal role that upcoming political and economic decisions will play in influencing financial markets over the next few months. Based on his analysis, there appears to be a potential advantage for gold over Bitcoin in 2024, making it an attractive prospect for investors seeking a secure haven during times of heightened uncertainty.
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