Bitcoin could hit all-time high prices then consolidate like gold, according to the analyst.
Bitcoin (BTC) has risen to rarely seen price highs, currently stalling between $17,000 and $18,500 before deciding on its next move. Gold recently broke all-time U.S.-dollar price highs, surpassing $2,000 per ounce before pulling back and consolidating in price. Bloomberg Intelligence strategist Mike McGlone thinks the same could happen with BTC.
“Short term, $20,000 is pretty good resistance,” he said in a Bloomberg interview on Wednesday.
“I’m afraid it’s probably going to do what gold did. It got to $2,000, and then that’s been consolidating in a bull market since.”
Bitcoin rose to just shy of $18,500 on Tuesday before falling close to $17,200 shortly after, based on TradingView.com data. Since then, the asset has traded sideways, consolidating between those two levels. On a longer-term scale, McGlone expects further bullishness for Bitcoin in the coming years. He explained:
“The key thing about Bitcoin this year is very simple — it just added a one to the front of the number. Remember, it was around $7,000 at the end of last year. What I’m worried about — if you look at the past performance, which is potentially indicative of the future, next year or two could add a zero to the back of the number.”
With his reference to $7,000 near the end of 2019, Bitcoin added a one to that figure, making it $17,000. Adding a zero to the back of $17,000 gives a future projection of $170,000. Bitcoin had already breached $18,000 during McGlone’s interview, however, so adding a zero could arguably mean a future price of $180,000.
McGlone touched on a number of other important points during the brief segment, including a reference to Bitcoin’s price swings. “Bitcoin is becoming a digital version of gold,” he explained. “One key point that’s happening this year is Bitcoin volatility has been declining,” he said. “In fact, it’s the lowest ever versus gold.”
The strategist also explained low Bitcoin volatility against the Nasdaq, a common mainstream market barometer. “Every other risk asset on the planet, volatility has been increasing, Bitcoin has been declining.”
McGlone also mentioned “institutional FOMO” on Bitcoin in line with money printing. This year has seen a number of mainstream financial players buy stacks of Bitcoin, such as MicroStrategy and Jack Dorsey’s Square.