Analysts emphasize the importance of Bitcoin maintaining values above a certain threshold related to gold to confirm its status as an independent asset. Key aspects of this topic are discussed in this article.
Gold Benchmark for Bitcoin
According to Bloomberg Intelligence's chief commodity strategist Mike McGlone, Bitcoin must maintain its position above the 2021 peak against gold to prove itself as an independent asset. This threshold currently resides at approximately 35 ounces of gold. Falling below this level would signify weakness. On August 14, the BTC/XAU pair reached as high as 36.9 ounces, though it has partially retraced. The lowest level of the year was recorded at 24.7 ounces in mid-April.
Comparison with Other Assets
McGlone views this threshold as a test of independence for Bitcoin. If Bitcoin can sustain itself above this benchmark, it can chart its own cycle; otherwise, it will remain overshadowed by speculators. Since the start of the year, Bitcoin is still trailing gold by 0.41%. Although this seems a minor gap, it undermines Bitcoin’s claim to independence. The peak of 36.9 ounces on August 14 represents a brief respite above the threshold, but the vulnerable region tested at 24.7 ounces in mid-April is still fresh in memory.
Forecasts and Future of Bitcoin
McGlone points to US Treasury bonds as a potential new significant trade. He notes that bond yields in China have eased toward 1.75%, arguing that this comparison could make US Treasury bonds an attractive target, given their more predictable risk/return balance. On the other hand, there are contradicting views regarding McGlone’s stance. Jurrien Timmer from Fidelity previously predicted that Bitcoin could surpass gold in the second half of the year. However, as the calendar progresses, Timmer’s anticipated scenario has yet to manifest.
Maintaining a position above 35 ounces of gold may be a key factor for Bitcoin's future development as an independent asset. Amid contradictory expert forecasts, Bitcoin's future reflects continuous dynamics and the undeniable significance of its market position.
