Concerns are emerging within the investment community regarding the future value of Bitcoin in relation to gold. Mike McGlone from Bloomberg Intelligence has shared insights predicting that the value of Bitcoin might decline significantly against gold, potentially dropping by 50% by 2026.
Currently, Bitcoin is valued approximately 20 times higher than gold, but McGlone forecasts that this ratio will favor a decline to 10 times the value of gold instead of rising to 30 times. He highlights that even if general trends in the USD may not reflect drastic changes, the purchasing power of Bitcoin relative to gold could undergo a substantial reduction.
McGlone underscores the Bitcoin-to-gold ratio as a critical indicator of economic health, suggesting that it often serves as an early warning signal for recession risks. His analysis indicates that the likelihood of the Bitcoin/gold ratio diminishing toward 10x holds greater probability than it remaining above 30x by the year 2026.
Furthermore, McGlone has noted a noteworthy degree of correlation between Bitcoin, stock markets, and market volatility, with a correlation coefficient of 0.5376. This degree of interrelation suggests that these assets may behave similarly in varying economic conditions, operating as part of a “risk-on, risk-off” investment strategy.
Looking ahead to 2026, McGlone provides additional projections, predicting that core Consumer Price Index (CPI) may fall to around 1%, with oil prices dipping near $40 and gasoline settling around $2. He estimates Bitcoin could stabilize around $50,000 at that time.
The implications of a declining Bitcoin value against gold are significant for investors. As both Bitcoin and gold are typically viewed as alternative investments, a shift in Bitcoin’s valuation could lead to a recalibration of investment strategies. Given the existing high correlation with stock markets and macroeconomic volatility, any changes in the Bitcoin/gold cross could reverberate through broader financial markets, warranting increased scrutiny from investors.
