Bitcoin Trading at 11x S&P 500 Suggests BTC May Be 'Rolling Over'

August 29, 2024 02:07 PM AEST | By Team Kalkine Media

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Bitcoin Trading at 11x S&P 500 Suggests BTC May Be 'Rolling Over' — Image source: shutterstock

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Bitcoin continues to face challenges in the risk asset landscape, according to Mike McGlone, senior commodity strategist at Bloomberg Intelligence. McGlone's recent analysis suggests that Bitcoin may no longer lead the race among risk assets, despite its reputation as the "fastest horse."

McGlone points out that {Bitcoin} (BTC) current value is approximately 11 times that of the S&P 500, while the S&P 500 itself approaches all-time highs. This contrasts sharply with Bitcoin's performance in early 2020, when it peaked at 15 times the value of the S&P 500—a record that remains unmatched. McGlone indicates that Bitcoin could face a 50% decline from its previous highs.

The analysis highlights a systemic weakness in Bitcoin’s performance relative to other assets. McGlone emphasizes that despite Bitcoin’s leading status in the past, its current trajectory suggests a significant shift. He has described Bitcoin as experiencing a “hangover,” reflecting its struggle to reach new highs and maintain its former dominance.

Recent price action for Bitcoin shows continued volatility around the $60,000 mark. Data from Cointelegraph Markets Pro and TradingView reveal that Bitcoin experienced a sharp drop, reaching as low as $58,000 before stabilizing. This volatility underscores the uncertainty in Bitcoin’s near-term outlook, even as it attempts to recover.

In contrast to Bitcoin, other assets such as gold and the S&P 500 have achieved new all-time highs, further highlighting Bitcoin’s relative underperformance. As Bitcoin grapples with its current challenges, the broader market dynamics suggest that its role in the risk asset race may be evolving, with implications for its future trajectory.

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