According to Senior Commodity Strategist Mike McGlone’s Oct. 5 Bloomberg Crypto Outlook report, while rising interest rates around the world are pushing down the value of most assets, Bitcoin is outperforming commodities and tech companies like Tesla.
Additionally, he said that October has typically become the best month for Bitcoin (BTC), with increases of roughly 20% on average for the month, and that the peaking of commodities may indicate that Bitcoin has reached its bottom.
“When the ebbing economic tide turns, we see the propensity resuming for Bitcoin, Ethereum, and the Bloomberg Galaxy Crypto Index to outperform most major assets.”
Due to its volatility, Bitcoin has historically had a strong correlation to tech stocks. As a result, when investors are attempting to reduce risk, traders are more likely to sell Bitcoin.
McGlone points out that compared to the Bloomberg Commodity Index, which monitors changes in the prices of commodities like gold and crude oil, Bitcoin has its lowest volatility ever. He further suggests that historically, when a cryptocurrency is headed for new highs, Bitcoin volatility is more likely to recover than that of commodities.
The idea that Bitcoin may be changing to behave more like “digital gold” is confirmed by Kaiko Research data, which was released on October 4. Following a strengthening of the US dollar as interest rates rise, Bitcoin’s correlation to gold reached its highest level in more than a year, at +0.4.
Therefore, we can say that Bitcoin could soon become a hedge against inflation. Recently even UK-based financial giant, Barclays said that BTC and its miners will make out of the current market turmoil.