Bloomberg Intelligence analyst Mike McGlone has issued a warning that the widening divergence between Bitcoin and gold may not be sustainable, based on valuation models. According to McGlone, Bloomberg's BE Model places Bitcoin's fair value near 13 times the price of gold, compared to the current ratio of approximately 20.3x. This implies a potential downward adjustment that could bring Bitcoin closer to $50,000 if gold prices remain stable.
The model highlights historical reversion patterns, with past episodes in 2018, 2020, and 2022 where similar divergences corrected sharply. Low equity volatility in the S&P 500, near cycle lows, is noted as a factor that could reduce investor appetite for high-beta assets like Bitcoin, adding pressure during tightening macro conditions.
In parallel, technical indicators are flashing rare signals not seen in market history. The Bitcoin versus gold monthly Bollinger Bands are expanding from their tightest reading ever, with analyst Tony 'The Bull' Severino suggesting a potential for significant trending-down moves. A close below the lower band could trigger a sell signal, and the weekly setup has already seen Bitcoin drop over 25% against gold in recent weeks.
Further analysis reveals that the BTC/Gold ratio has dropped below the statistical lower boundary of a 15-year power-law model, a rare occurrence last seen in late 2017. Over the past 12 months, Bitcoin has declined 45% against gold, and it would require a 99% rally—equivalent to Bitcoin reaching around $170,000—to surpass its previous all-time high against the precious metal.
Collectively, these findings indicate that Bitcoin's valuation relative to gold is at extreme levels, with both fundamental models and technical charts pointing towards an increased risk of correction or reversion to historical norms.
