“Stuck between 3-9x over the past few years, the price of #Bitcoin per ounce of #gold tilts the crypto toward resuming appreciation, if volatility history tells us anything. The Aug. 19 cross rate of 6x is the same as in 2017, yet Bitcoins’s volatility has dropped relative to gold.”
Gold’s volatility has been increasing recently as the U.S. dollar swings back and for, responding to macroeconomic trends like news regarding the next U.S. stimulus bill and the predictions for the election.
Bitcoin’s volatility has been decreasing recently as the asset has found itself stuck in a range between $11,000 and $12,000.
This isn’t the only fundamental trend shared by McGlone suggesting that Bitcoin’s price is poised to continue its uptrend.
The analyst recently commented that Bitcoin’s decreasing supply, enabled through block reward halvings, and an increase in demand should result in an increase in value over time:
“Bloomberg Intelligence Commodity Primer – Something unexpected needs to happen for #Bitcoin’s price to stop doing what it’s been doing for most of the past decade: appreciating. Demand and adoption metrics remain favorable vs. the #crypto asset’s unique attribute of fixed supply.”
Explaining how demand for Bitcoin is increasing, McGlone has mentioned the CME’s BTC futures market and the Grayscale Bitcoin Trust. These are two markets through which institutions can gain exposure to the leading cryptocurrency.
Grayscale’s Bitcoin Trust holds a large portion of all BTC in circulation as institutional investors have poured capital into the fund while the open interest of the CME’s BTC market has increased.
Assuming that the market supply of BTC decreased in the wake of the halving, this increase in demand should allow prices to drift higher over time.
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