Bloomberg Intelligence senior commodity strategist Mike McGlone states Bitcoin’s (BTC’s) relative discount to the high hash rate in October — the biggest because the first quarter of 2020 — could soon see Bitcoin go back to “its tendency to outshine most assets.”
Within an March. 19 Twitter publish, the Bloomberg analyst recommended that Bitcoin’s ever growing hash rate — a stride from the processing power and security of the blockchain — in accordance with its cost points “to risk/reward leaning favorably.”
Many think that theoretically Bitcoin’s hash rate is going up in accordance with its cost.
McGlone pointed to some graph noting the 10-day average of Bitcoin’s hash rate in October is “roughly equivalent” to the stage it ought to be around $70,000. However, the cost is instead currently at $19,500 by March. 18.
McGlone noted that this type of large gulf between your cost and also the hash rate was last seen throughout the “1Q 2020 swoon” — a dip that preceded a meteoric climb that lasted through 2020 and 2021.
McGlone tipped it had become possible we’re now visiting a “similar cost foundation developing now.”
The Bloomberg analyst, considered to be a perma bull, stated the high rash rates, together with rising demand, adoption and regulation means Bitcoin might be entering an “inexorable phase of their migration in to the mainstream and also at a comparatively discounted cost.”
Inside a separate publish on Linkedin, McGlone stated it “can be a few time” before Bitcoin returns to the tendency to outshine most major assets, commenting:
“Coming back to the tendency to outshine most assets can be a few time, as mainstream adoption progresses and adaptive alterations in US accounting standards provide a good start.”
McGlone also stated Bitcoin’s cost “should still rise over time” because of the laws and regulations of demand and supply, adding that the cryptocurrency is showing indications of “bottoming” in 4Q 2022.
Related: Bitcoin prone to transition to some risk-off asset in H2 2022, states Bloomberg analyst
“It’s little surprise that the relatively recent asset which had skyrocketed has declined because of the rapid pace of Fed tightening in 2022, but Bitcoin is showing indications of bottoming and divergent strength in 4Q,” he described.
Formerly the Bloomberg analyst has recommended that BTC is really a “wild card” that is “ripe” to outshine once traditional stocks finally bottom out, and predicted that BTC had the possibility to achieve $100K in 2022 because the digital currency completes its transition from the risk-onto a danger-off asset.
