Bloomberg Senior Commodity Strategist: Bitcoin and Gold ‘Set To Shine’ in H2 2021

The recently-released June 2021 edition of Bloomberg research report “Bloomberg Commodity Outlook”, which was written by Mike McGlone, a Senior Commodity Strategist at Bloomberg Intelligence (Bloombergs research arm on the Bloomberg Terminal), is quite bullish on the outlook for both gold and Bitcoin in H2 2021.

Here are some highlights from this report:

• The “mainstream migration trend” seems strong as evidenced by the popularity of several Bitcoin ETFs in Canada and the growing list of Bitcoin ETF proposals that are waiting for the SECs approval.

• The steady decline in the U.S. 30 Year Treasury Bond (from 2.415% on May 12 to 1.89% on July 8) means that there is less competition for store of value assets such as gold and Bitcoin.

• In H1 2021, the S&P 500 and Bitcoin went up by the same amount. As for H2 2021, “some ebbing of the equity tide” could pose a short-term risk for Bitcoin. As for now, Bitcoin being “cold” (having fallen from its year-high price of nearly $65,000 on April 12 to around $32,555, where it is now) and stocks appearing “too hot” (on July 7, the S&P 500 and Nasdaq Composite set all-time highs, reaching 4358.13 and 14665.06 respectively) suggests more upside potential for Bitcoin than stocks in H2 2021.

• The crypto crackdown in China, the U.S. Securities and Exchange Commission (SEC) still failing to approve a Bitcoin ETF, and ESG concerns about the power consumption of Bitcoin mining are three “shorter-term price headwinds” that could morph into“ longer-term tailwinds.”

• Bitcoin appears to be on the path to “stabilize around 100x an ounce of gold” (an ounce of physical gold currently costs around $1,800).

On July 2, McGlone said that regardless of whether you think we are in a bear market or a bull market, “selling Bitcoin on initial dips below its 50-week moving average in the past has proven a good way to lose money.”