Bitcoin's discount to hash rate highest since early 2020 — Mike McGlone

Bloomberg Intelligence elder commodity strategist Mike McGlone says Bitcoin's (BTC's) relative discount to its precocious hash complaint successful October — the largest since the archetypal 4th of 2020 — could soon spot Bitcoin instrumentality to "its propensity to outperform astir assets."

In an Oct. 19 Twitter post, the Bloomberg expert suggested that Bitcoin's ever expanding hash complaint — a measurement of the processing powerfulness and securit of a blockchain — comparative to its terms points to "to risk/reward leaning favorably."

Many judge that successful mentation Bitcoin's hash complaint should spell up comparative to its price.

McGlone pointed to a graph noting that the 10-day mean of Bitcoin’s hash complaint successful October is “roughly equivalent” to the level it should beryllium astatine astir $70,000. However, the terms is instead currently astatine $19,500 arsenic of Oct. 18.

McGlone noted that specified a ample gulf betwixt the terms and the hash complaint was past seen during the “1Q 2020 swoon" — a dip that preceded a meteoric ascent that lasted done 2020 and 2021.

McGlone tipped that it was imaginable we are present seeing a “similar terms instauration forming now."

Graph of Bitcoin hash complaint and price. Source: Bloomberg Intelligence

The Bloomberg analyst, known to beryllium a perma bull, said that the precocious rash rates, on with rising demand, adoption and regularisation means Bitcoin could beryllium entering an "inexorable signifier of its migration into the mainstream and astatine a comparatively discounted price."

In a abstracted post connected Linkedin, McGlone said it "may beryllium a substance of time" earlier Bitcoin returns to its propensity to outperform astir large assets, commenting: 

"Returning to its propensity to outperform astir assets whitethorn beryllium a substance of time, arsenic mainstream adoption progresses and adaptive changes successful US accounting standards springiness it a lift."

McGlone also said Bitcoin’s terms “should proceed to emergence implicit time” fixed the laws of proviso and demand, adding that the cryptocurrency is showing signs of "bottoming" successful 4Q 2022. 

Related: Bitcoin apt to modulation to a risk-off plus successful H2 2022, says Bloomberg analyst

“It's small astonishment that a comparatively caller plus that had skyrocketed has declined owed to the accelerated gait of Federal Reserve tightening successful 2022, but Bitcoin is showing signs of bottoming and divergent spot successful 4Q," helium explained.

Previously the Bloomberg expert has suggested that BTC is simply a "wild card" which is "ripe" to outperform erstwhile accepted stocks yet bottommost out, and predicted that BTC had the imaginable to scope $100K successful 2022 as the integer currency completes its modulation from a risk-on to a risk-off asset.