Bloomberg says to get the price of Bitcoin, simply multiply that of gold by 6. Even with this, it still believes that Bitcoin’s price is below the real value.
Bloomberg’s cryptocurrency analysis for the month of August suggests that Bitcoin will be six times better than gold in terms of price and that even this correlation doesn’t reveal Bitcoin’s true worth. Bloomberg based its prediction on the recent ATHs made by the two assets.
Bitcoin may soon climb to $18,000 with this trend
Bloomberg is one of those saying that Bitcoin will soon become a digital gold. This position is strengthened by the facts that BTC has a limited supply and it is taking its time to grow. Now Bloomberg has come up with another ideology saying that Bitcoin and gold have a certain factor to compare their relationship:
“Stabilizing at about 6x the per-ounce price of gold, Bitcoin’s increasing correlation and declining volatility relative to the precious metal indicate an enduring relationship for price advancement, in our view. Unparalleled global central-bank easing should remain a tailwind for the quasi-currencies.”
It is still not generally accepted to use a simple equation to compare the prices of gold and bitcoin. Nevertheless, if Bloomberg’s mathematical relationship is something to hold onto, it means that the cryptocurrency will soon be valued at $18,000. Consequently, the price of gold will rise to $3,000 per ounce.
Bitcoin is worth even more says Bloomberg
Bloomberg says the price of Bitcoin should even be higher than it is currently. It says an on-chain indicator supports its position:
“The 30-day average of addresses from Coinmetrics on Aug. 4 translated to a Bitcoin price above $14,000, vs. about $11,000 on an auto-scale basis since 2017.”
It should be recalled that Grayscale’s Bitcoin Trust Fund (GBTC) has been partly responsible for the reduced supply of BTC. Within a year, the trust has bought about 33% of newly mined BTC. If Grayscale continues at its current rate of buying BTC, it will be absorbing half of BTC supplied in one year, leaving a few for others, thereby increasing the price of the asset.