Bloomberg analyst believes Bitcoin’s rising value is bad for commodities, citing copper as an example.
Morgan Stanley and JPMorgan gave bearish views on gold and copper in December.
Other strategists have given bullish forecasts though, including billionaire Paul Tudor Jones who noted this week that commodities were “greatly undervalued.”
Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, has suggested that commodities are unlikely to witness a price supercycle if Bitcoin’s growth and maturity is anything to go by.
The strategist has previously predicted that Bitcoin’s price could rally to $100,000 this year, and he’s not convinced of a similar run for commodities.
McGlone says that Bitcoin’s market resilience and prospects for metals like copper indicate that there is low potential for a huge uptick in commodities. McGlone made this comment. sharedFollow us on Twitter at @Twitter.
He noted that Bitcoin has the “edge” over copper, referring to the comparison between digital gold versus “the Old-Guard Doctor.”
Looking at a chart comparing Bitcoin’s rising price and declining risk versus copper futures, and the 260-day volatility for both assets, McGlone noted:
Chart showing Bitcoin price comparison with copper. Source: Mike McGlone Twitter
“Copper may be a good example of the low potential for a commodity supercycle, notably vs. an advancing Bitcoin. We see Bitcoins’ upper hand gaining endurance, and maturity, vs. copper.”
Other analysts’ views on gold, copper, and other commodities
Analysts at JP Morgan & Morgan Stanley were available for December forecastFor 2022, a bearish outlook on gold, silver and copper
JP Morgan predicted that the US real yields would edge higher in 2022. Gold prices will likely fall to around $1520 per ounce. Morgan Stanley, on the other hand, predicted copper would see more volatility, but likely stay “vulnerable to macro moves.”
Early this year, Fat Prophets commodity analyst David Lennox told “Street Signs Asia” that he expectedGold to rise to $2,100 an ounce by the end of this year He spoke of rising US inflation and weakness for the US Dollar as potential catalysts to a surge in gold prices.
According to him, gold’s safe-haven status remains its biggest pull factor in the face of turbulence across markets and on the geopolitical scene.
On Monday, legendary trader and hedge fund billionaire Paul Tudor Jones noted that contrary to some observations, commodities were “greatly undervalued” and that they would outperform financial markets long term.
CNBC interview with Just Capital cofounder. said assets that performed well during the pandemic will be in for a “tough sledding”. He also said:
“Things that performed the best since March 2020 are probably going to perform the worst as we go through this tightening cycle.”
The price of gold fell to $1,815 an troy ounce on Thursday. This was down 0.6% after it had reached highs of $1.827 in the previous session. Copper and silver were also in the red, with 0.8% drawdowns and 1.2% respectively.
Bitcoin declined 1.2% to $43,150 levels following a decline from intraday highs $43,800.