Well, bitcoin is struggling heavily as of late. The currency has dropped by more than $2,500 in the past couple of weeks, and it’s now trapped in the $7,000 range.
Bitcoin: Still the “Go-To” Financial Tool
And yet, many analysts say that investors are not likely to give up the currency altogether and will still flock to bitcoin and other forms of crypto in droves. Mike McGlone, a senior commodity strategist at Bloomberg, even goes so far as to say that bitcoin is no longer an object for pure speculation, and instead insists that the currency is now a more “stable asset.”
Bitcoin has matured, now. [Bitcoin] futures are getting active. We’re going to have ETFs. The first ten years, we’ve had a run up, and now it’s in a range that’s going to migrate higher. Volatility is one thing that’s almost going to be certain to get crushed.
It’s strange, because while we’d like more than anything to believe all these words, it’s hard to do so at press time. Right now, bitcoin has given in to its highest ratio of volatility since 2019 began. The drop mentioned before has taken bitcoin into its lowest month since May, and it looks like the currency may slink further down before it officially hits a valid support level.
In addition, every opportunity for a bitcoin exchange-traded fund (ETF) – whether it be through Van Eck Solid X or Bitwise – has been unceremoniously rejected by the Securities and Exchange Commission (SEC), and it’s unclear when – or even if – such a trading tool would come to fruition.
Still, McGlone comments that bitcoin is very much like “digital gold,” words once spelled out by fellow cryptocurrency advocates such as David Marcus, who heads Facebook’s illustrious blockchain division.
In May of 2020, the next bitcoin halving is set to take place. In the past, a crypto halving has been known to bear negative effects on a specific cryptocurrency. However, McGlone believes the opposite will occur this time around. He states:
One of the unique things about bitcoin is limited supply. Bitcoin, as we well know, has limited supply, and as a commodity guy, when I see something with a supply that’s guaranteed to be limited, yet demand is up with more adoption, I view that as very attractive for price.
We’re in a Bull Market
Despite the volatility and heavy price fluctuations we’ve seen over the past few weeks, McGlone comments that bitcoin is still bullish, and that crypto enthusiasts should accept that we’re in a bull market considering just seven months ago, the currency was trapped at $5,000, and prior to that, it was stuck in the mid-$3,000 range for several months. He comments:
We’re back to normalization. It’s a bull market. It’s been brewing for years.