McGlone: Bitcoin's Major Price Hikes Waning?

Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, recently shared insights on X, the platform once known as Twitter, suggesting that the era of substantial Bitcoin price surges might be drawing to a close. McGlone points to a trend of decreasing volatility in Bitcoin in 2023, a pattern that seems to be prevalent across many assets. As Bitcoin continues its journey into the mainstream, McGlone believes this could lead to reduced risks associated with the cryptocurrency. However, this mainstreaming process might also limit its potential for significant price hikes.

Elaborating on this, a Bloomberg research report highlighted that Bitcoin’s price, though seemingly aligned precariously with the stock market, is not an anomaly. Typically, risk assets face challenges when the S&P 500, a global benchmark, experiences a downturn. The report underscores the declining volatility for both Bitcoin and the stock index since the end of Q1. Bitcoin’s emerging role as “digital gold” is evident, but its volatility, which is currently three times that of gold, suggests there’s still room for stabilization. This is a marked change from 2018, when Bitcoin’s risk was approximately ten times that of gold, showcasing the cryptocurrency’s maturation.

In a separate development reported by Bloomberg, the potential debut of Ether-futures ETFs in the US is drawing attention. Recent filings from companies like Bitwise, Volatility Shares, and ProShares suggest a keen interest in Ether futures-based exchange-traded funds. Some of these filings even hint at innovative products, such as combined Bitcoin-Ether-futures offerings. Volatility Shares is eyeing October 12 for the potential rollout of its Ether Strategy ETF, set to trade under the ticker ETHU.

However, the broader cryptocurrency market’s response to these developments has been tepid, as noted by Bloomberg. Bitcoin’s price has largely stagnated at around $29,000 throughout July and August. Ether, which alongside Bitcoin, commands a significant portion of the crypto market, has declined by about 6% since the month’s onset. Both tokens currently trade at nearly half their peak values.

Ben Johnson of Morningstar Inc., as quoted in the Bloomberg article, commented on the diminishing public fervor for cryptocurrencies. He suggests that the zenith of mass interest and adoption might have been reached. Todd Rosenbluth of VettaFi echoed this sentiment, indicating a possible investor shift towards stock-centric ETFs over crypto-focused ones.

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