The asset has significantly outperformed gold this year.
Bloomberg Intelligence Senior Macro Strategist Mike McGlone has asserted that Bitcoin shows indications of a potential supercycle.
For context, a supercycle is an extended period of strong growth characterized by sustained demand that exceeds the available supply.
In a tweet yesterday, McGlone pointed out that this year, Bitcoin has outperformed gold, the top performer amongst traditional assets, by “almost 10×.” According to the analyst, the performance indicates a crypto supercycle, noting the low adoption phase and limited supply of the leading digital asset favor this outcome. Consequently, the analyst suggests we will likely see increased Bitcoin volatility compared to traditional commodities as the asset forges its path to new highs.
Furthermore, McGlone notes that recent bank collapses would only fuel this rise highlighting the benefits of Bitcoin and fully backed dollar stablecoins in contrast to the fractional reserve system operated by banks.
Looking for a super cycle? Bitcoin Outperforms #Commodities With Declining Risk – #Bitcoin beating #gold, the top-performing old-guard commodity in 2023 to March 20, by almost 10x may be indicative of a super cycle happening in the #crypto. pic.twitter.com/DGdAL3PW3C
— Mike McGlone (@mikemcglone11) March 21, 2023
The statements from the analyst come as the digital asset delivered another impressive showing over the weekend to break above $28k. At press time, the asset has held above the $25k price point for nearly seven days. Recall that McGlone had asserted that the asset’s price had to hold above this level to signal a sustained price rally. As highlighted in a previous report, the BTC’s price has rallied by over 40% since the Silicon Valley Bank collapse.
Meanwhile, there will likely be some volatility in the markets today as the Fed is scheduled to release a rate hike decision following its two-day policy meeting. The expectation is that the metric would see another 25 basis point hike, but some speculate that the Fed may even be forced to consider a pause in its tightening regime in the wake of exposed frailties in the banking system.
In a Twitter thread today, Economist Alex Krüger gave about six possible scenarios of the Fed meeting outcome and potential corresponding BTC price reactions. Notably, the outcomes highlighted by the analyst were largely positive for the digital asset in varying degrees. Furthermore, Krüger cautions those trading the news that the ensuing price reaction could easily be reversed the next day, citing price action from May 4-6, 2022.
My FOMC framework for tomorrow
#1 -25bps (3%) => very strong trend (BTC 40k fast)
#2 +0bps (37%) => strong trend (BTC low 30s)
#3 +25bps (60%) => dip on statement, back to flat by press conference, then Powell decides direction during the press conference
— Alex Krüger (@krugermacro) March 22, 2023
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