Mike McGlone, a commodity strategist at Bloomberg Intelligence, has suggested that Bitcoin might be entering a phase of unstoppable maturation. He compared BTC to crude oil, which last reached $84 per barrel in 2007, before Bitcoin was even created. Notably, the price of Bitcoin has not fallen significantly due to the recent interest rate hikes by the Federal Reserve, indicating that its volatility may be decreasing, CryptoChipy reports.
BTC Price Movements Could Mirror Gold
Bitcoin’s status may evolve in the coming months, as it gains recognition as a “risk-off” asset. This could lead to price movements that resemble those of gold. The same analyst noted that Bitcoin’s diminishing supply is an unprecedented event in the global economy. He predicts that the price of Bitcoin will continue to rise, unless something hinders its adoption.
The Growing Adoption Rate of Bitcoin
There is no indication that the number of Bitcoin buyers is declining. In fact, it’s likely that adoption will continue to grow. Countries experiencing high inflation are likely to turn to cryptocurrencies like Bitcoin for trade. This is particularly important in developing countries, where the value of local currencies can fluctuate dramatically. For example, Venezuela’s inflation rate is expected to reach around 40% in 2023 and could soar to 150% in 2024, making it difficult for people to save or plan their finances.
Is Bitcoin the Digital Equivalent of Gold?
It has often been claimed that Bitcoin is the new gold. This means it could act as a hedge against inflation, given its limited supply. Similarly, Bitcoin should have low correlation to traditional assets like equities and bonds. Like gold, Bitcoin is expected to help individuals store value outside of government control. But is Bitcoin truly the digital equivalent of gold?
Gold Has Been Performing Better Than BTC Recently
Gold’s price tends to rise during times of economic uncertainty and high inflation, as more people seek it as a safe haven. Recently, the Federal Reserve’s interest rate hikes caused a decline in stock prices and introduced a crypto winter. Gold has been outperforming Bitcoin lately, leading many to lose confidence in cryptocurrency as a hedge against inflation.
For Bitcoin to fulfill its role as digital gold, it needs to achieve broader adoption. With its fixed supply and independence from any nation, Bitcoin could maintain its value even in tough economic times. However, this is only possible if it has a large enough pool of users. This requires increased participation from retail investors and more institutions adding Bitcoin to their balance sheets.
Bitcoin’s Maturation Process in the Near Future
As the oldest and most valuable cryptocurrency, Bitcoin is likely entering a stage of unstoppable maturation. According to Mike McGlone, Bitcoin is set to mature into a fully developed asset, partly because its value has not dropped following the recent interest rate hikes by the Federal Reserve. He also pointed out that crude oil last traded at $84 per barrel in 2007, just before Bitcoin’s white paper was released. This could encourage more people to buy Bitcoin, as it seems to be taking its place as digital gold. Additionally, the Federal Reserve is expected to ease its monetary policies in the coming months, which could push Bitcoin’s price—and the prices of other cryptocurrencies—higher.
