In the ever-evolving world of cryptocurrency, a concerning trend between Bitcoin, gold, and the S&P 500 has caught the attention of Mike McGlone, a senior strategist at Bloomberg. This observation comes in the wake of the SEC’s approval of Bitcoin ETFs earlier this year, which initially propelled Bitcoin to new heights. However, despite strong flows, Bitcoin has failed to surpass its previous all-time highs against gold and the S&P 500 in 2021.
McGlone suggests that the launch of the US ETF in January resulted in record inflows, solidifying Bitcoin’s position as a leading indicator. However, this could have implications for risky assets, as the cryptocurrency market may be experiencing a hangover from its first-quarter surge. While Bitcoin has traditionally exhibited volatility and speculation, it was previously rising against gold when the S&P 500 e-mini futures broke above its 50-week moving average in November. But this time, the Bitcoin/gold cross is on the decline.
This slump in the Bitcoin/gold crossover, in contrast to the performance of the S&P 500, may signal a reversal in the trend of investing in risky assets. It is worth noting that Bitcoin’s recent decline comes after the halving event, which historically triggers short-term selling. Following the fourth halving, the Bitcoin price dropped and stabilized around $57,000, marking its lowest value in the past two months. Since its peak of $73,000 in mid-March, Bitcoin has experienced a correction of nearly 20%.
However, this outlook does not deter Glassnode’s belief that Bitcoin’s current upward trend is remarkably resilient, with corrections thus far being relatively minor. It remains to be seen how this dynamic between Bitcoin, gold, and the S&P 500 will continue to evolve in the cryptocurrency landscape.
Disclaimer: The views and opinions expressed in this article are solely for informational purposes and should not be considered as financial or investment advice. Investing or trading cryptocurrencies carries the risk of financial loss.