Mike McGlone, a commodity strategist at Bloomberg Intelligence, said in a Wednesday LinkedIn post that bitcoin may have already reached its lowest point and could start to increase in value this month. According to him, October could see bitcoin potentially perform better than most major non-crypto assets such as gold.
Bitcoin’s Price Could Increase in October
Giving reasons for his views, McGlone mentioned some factors he thinks could boost bitcoin’s price.
First, the strategist referred to how bitcoin has performed in the month of October for seven consecutive years. He stated that since 2014, bitcoin tends to do well in October, adding that the asset usually gains an average of 20% increase in value during that month. As such, McGlone expects this year’s October to be no different.
McGlone further made reference to the increase in interest rates by the US government to control inflation in the country. According to him, despite the fact that the rate hikes are putting pressure on several valuable assets by negatively affecting their prices, major commodities and tech stocks are already appearing to peak.
The strategist noted that if commodities and stocks are beginning to recover despite the pressure, then bitcoin, which is presently coping well compared to other non-crypto assets, is also on the road to recovery and could potentially perform better than major assets.
“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,” McGlone stated.
Bitcoin to Become a Risk-off Asset?
McGlone also mentioned that bitcoin’s record of low volatility last month, as well as the fact that there could be a potential surge in commodity prices, may see bitcoin move closer to becoming a risk-off asset like gold.
A risk-off asset is an asset that performs well and/or is invested in when uncertainty or negativity concerning market conditions arises.
“Rate hikes by more central banks than ever is a strong headwind. But it’s the potential for the benchmark crypto to shift toward becoming a risk-off asset, like gold and US Treasuries, that may play out in 2H,” McGlone said.
