Strategist flags Bitcoin’s most ‘troubling sign’ to watch
Main Idea
Bitcoin's volatility relative to gold has reached an all-time low, with its risk premium narrowing, which may signal challenges for its future outperformance despite recent record highs.
Key Points
1. Bitcoin's 260-day annualized volatility was 2.2 as of August 1, significantly lower than its typical average since 2021.
2. The Bitcoin-to-gold price ratio remains range-bound, indicating suppressed volatility and fading speculative appeal.
3. Bloomberg Intelligence's Mike McGlone warned that Bitcoin's 'risk-on' nature could struggle if markets remain flat, potentially benefiting 'risk-off' assets like gold.
4. Despite strong gains in 2025, with Bitcoin hitting a record high above $123,000 and gold facing resistance near $4,000, Bitcoin's narrowing risk premium raises concerns.
5. McGlone suggested that 2025 might be viewed as a challenging year for Bitcoin if current market conditions persist.
Description
Bitcoin’s ( BTC ) volatility relative to gold has plunged to an all-time low, raising red flags about the cryptocurrency’s future performance compared to the traditional safe-haven asset. As of August 1, Bitcoin’s 260-day annualized volatility stood at just 2.2 times that of gold, its lowest ratio on record, according to data shared by Bloomberg Intelligence senior strategist Mike McGlone on August 4. Since 2021, Bitcoin has typically averaged more than three times the volatility of gold while d...
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