Decline in Bitcoin-Gold Ratio Signals Risk Asset Adjustment After Midterm Elections

Ahead of the U.S. midterm elections, the relative price movements of Bitcoin and gold have emerged as warning signals in the risk asset market. Mike McGlone, senior commodity strategist at Bloomberg Intelligence, warned that Bitcoin's value compared to gold is likely to decline further, suggesting that this trend could lead to a broader adjustment in risk assets, including tech stocks. According to McGlone, on October 31, the price of one Bitcoin was equivalent to about 20 ounces of gold, and he assessed that there is a significant risk of the Bitcoin-gold ratio falling to 15 times rather than rising to 25 times. A decline in the ratio indicates that Bitcoin is relatively weaker than gold. He analyzed that Bitcoin's weakness against gold could reflect a weakening of investors' risk appetite. In particular, he warned that if the Bitcoin-gold ratio fails to maintain 20 times, the preference for gold as a safe-haven asset could increase, leading to downward pressure on tech stocks as well. McGlone emphasized that rather than being optimistic about stock price increases after the midterm elections, one should prepare for the possibility of adjustments. At the time of reporting, Bitcoin was trading at $77,237, while gold was priced at $3,947.22 per ounce.

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