• Bitcoin is one of the best performing assets of the year according to Bloomberg Intelligence.
• The firm’s senior macro strategist, Mike McGlone, compared the rally to a similar recovery in early 2019.
• The analyst said that Bitcoin’s rally from the start of the year until January 17 may either signal either a bottom or a „bouncing bear“.
Investors around the world have been closely following the price of Bitcoin in recent weeks, as the cryptocurrency has seen a major surge in value. According to Bloomberg Intelligence, Bitcoin is now one of the best performing assets of the year. The firm’s senior macro strategist, Mike McGlone, compared the rally to a similar recovery in early 2019, noting that this time the environment is one of contracting liquidity.
McGlone shared his thoughts on the surge in a post to LinkedIn on Wednesday, where he stated that Bitcoin’s rally from the start of the year until January 17 may signal either a bottom or a „bouncing bear“. He noted that while the bias is both, this is a key difference compared to 2019’s early-year turnaround. He wrote, „The Fed’s contraction of liquidity, a flattening yield curve, and a weakening dollar — all of which preceded the Bitcoin surge — are very different than the environment of 2019’s Q1 rally.“
McGlone also pointed out that Bitcoin’s surge has been relatively modest compared to other digital assets like Ether and Ripple. He added, „The rally to date is less than half of the gains of 2019’s first quarter, and its price has lagged behind Ether and Ripple, which have both gained more than 50% since the start of the year.“
At the same time, McGlone noted that Bitcoin’s rally is more likely to be sustained than other digital assets, since it has the largest market capitalization and the most liquidity. He concluded his post by saying, „The broad-based liquidity-driven rally is evidence that Bitcoin is back, or at least bouncing bearishly, and could be the most resilient digital asset to benefit from the current macro environment.“
Overall, it appears that Bitcoin is emerging as one of the best performing assets of the year, with the macro environment and liquidity contraction playing a major role in its surge. While other digital assets have seen larger gains, Bitcoin’s rally is likely to be more sustained, due to its large market capitalization and liquidity. For investors, this could be an opportunity to get in on the ground floor of a potentially lucrative investment.