Bloomberg’s senior commodity strategist thinks broader macroeconomic factors could shine favorably on both Bitcoin (BTC) and Ethereum (ETH) despite their rocky start to 2022.
In a new analysis, Mike McGlone says the United States midterm elections in November plus rumblings of a potential war in Eastern Europe indicate that the top cryptocurrencies could have a relative advantage over other investment classes.
“Crypto assets may have a lot going for them as US midterm elections approach, notably versus inflation-related commodities.
Typical demand and supply elasticity, and crude prices buoyed by the risk of war in Ukraine, are strong catalysts to refresh oil’s enduring bear market.
It’s the opposite for Bitcoin and Ethereum.”
The report refers to crude oil as “the most significant commodity,” but notes that Bitcoin might be poised to surge as supply and demand needs shift.
“Representing advancing technology, Bitcoin is gaining traction as a benchmark global digital asset, while oil is being replaced by decarbonization and electrification.
Bitcoin may be uniquely situated for enduring price appreciation. Well on its way to becoming global digital collateral, the first-born crypto launched a revolution in the digitalization of finance, which appears in its early days.”
McGlone thinks domestic policy decisions regarding the digital asset space will also prove beneficial in the months ahead.
The Bloomberg analyst explains,
“We expect US policymakers will embrace cryptos with proper regulation and ETFs [exchange-traded funds] for these reasons: dollar dominance, jobs, votes, lots of revenue (tax) and – most importantly – it’ll run counter to China’s antipathy [to cryptocurrencies].”
McGlone concludes by saying Bitcoin’s recent rebound near the $40,000 level looks more like “a floor than a ceiling,” and the next key upward threshold could indeed be $100,000.
Bitcoin is currently trading sideways at $37,202.
Regarding the price of Ethereum, McGlone says,
“Bullish fundamentals are intact, and technical guidance has been straightforward, with buyers benefiting around $2,000 and sellers at about $4,000.
Ethereum could repeat last summer and revisit about $1,700.”
At time of writing, Ethereum is neutral on the day and priced at $2,684.
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