The price of Bitcoin fell below $60,000 on Tuesday and Wednesday after posting big gains over the weekend following the Federal Reserve’s decision to cut interest rates. The spot price briefly hit $65,000 before falling back.
But Bloomberg’s McGlone remains bearish despite the market’s moves. He believes BTC’s apparent lack of enthusiasm could signal a slow path forward for the highly secure Web3 property.
Bitcoin multiple versus US stocks
Is the fastest horse announcing that the race is over? With a speed of 11x now, the #Bitcoin/The S&P 500 peaked at 15x in Q1 2020 and the lowest high this year was 14x. The largest money injection in history and past tense US ETF launches may suggest a hangover, a pendulum swing back towards 7x Bitcoin/SPX.… image.twitter.com/dGGk0bYKRo
— Mike McGlone (@mikemcglone11) August 27, 2024
On Tuesday, McGlone asked his followers on X: “Is the fastest horse signaling the race is over?” He said the largest ever money injection from the Federal Reserve and back-door ETF listings “may suggest a hangover” for Bitcoin.
The Bloomberg Intelligence strategist’s argument is that the relationship between the price of bitcoin and the S&P 500 index looks anemic compared to recent market history. “With a ratio of around 11x now, the peak of #Bitcoin/S&P 500 was 15x in [1Q21] And the lowest high this year was 14x.”
It’s a like-for-like comparison because Bitcoin is a factor of its market cap and the S&P 500 It is calculated of the market capitalization of the companies that comprise it, using an index divisor for all you math whizzes who watch CNBC.
But if Bitcoin has already managed to multiply the S&P 500 index by 15 times once before, in March 2021, and almost achieved it this year, then it can do it again. That’s what the BTC Marathon Digital bulls like They are counting on in the short term, when they double their investment in the asset.
Will Bitcoin Price Hit $81,000?
If Bitcoin were to reach 15 times the S&P500 again, it would reach $81,818 even if the index were to remain at the same level today. That could mean there is still plenty of room for the largest cryptocurrency to rise in this turn of the supercycle.
That figure is interesting because Blockstream CEO Adam Back recently pointed to an $80,000 bitcoin price prediction based on a hedge fund analyst’s MicroStrategy stock forecast. McGlone says the ratio shows weakness in BTC markets and adds that Bitcoin is suffering from a hangover. However, it could indicate that BTC is undervalued relative to cyclical trends.
If the S&P 500 index grows at the pace of its 2024 returns and bitcoin price If it reaches 15x again, BTC could be trading above $98,000. Therefore, this multiple shows that there is still plenty of room for this bull to advance.
Furthermore, the last time bitcoin markets hit this multiple was ten months after the third halveSo far, only five months have passed. from the fourth halving this year.
When this hangover wears off, some diamond experts may be making a profit. Has anyone noticed that it’s a hair of the dog?
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