The relative value trend between Bitcoin and gold is flashing a warning signal for risk asset markets, according to Mike McGlone, Chief Commodity Strategist at Bloomberg Intelligence, who noted that the downward move in this ratio could signal mounting correction pressure across a broad range of asset classes, including technology stocks.
McGlone conducted an in-depth analysis of the linkage between the Bitcoin-to-gold price ratio and the Nasdaq 100 Index, and cautioned investors against harboring overly high expectations for a post-midterm-election market rally. Data from the 31st of last month showed that one Bitcoin was worth only about 20 ounces of gold.
McGlone stressed that the 20x level represents a critical market dividing line, with the ratio's subsequent trajectory more likely to retreat toward 15x than climb to 25x. This ratio essentially measures how many ounces of gold a single Bitcoin can be exchanged for, and its decline directly reflects Bitcoin's relative underperformance.
Looking back to 2021, Bitcoin significantly outperformed gold, driven by massive monetary easing and a low-interest-rate environment. However, despite the fact that over the past five years Bitcoin's 260-day standard deviation has been roughly three times that of gold—indicating higher volatility—it has not been able to consistently generate excess returns as a result.
Data compiled by Woofun AI shows that Bitcoin is currently trading at $77,237 per coin, while gold stands at $3,947.22 per ounce. The weakening of the ratio under this price structure profoundly reflects a cooling of investor risk appetite. When the ratio struggles to hold at the 20x level, gold's appeal as a safe-haven asset rises relatively, thereby exerting downward pressure on technology stocks.
McGlone believes that if U.S. stock markets decline this week, the downtrend in Bitcoin—as well as in gold, silver, platinum, and palladium, which have all posted significant gains this year—could further intensify. This analysis does not assert that prices will inevitably fall, but rather suggests that the market should focus more on preparing for potential corrections rather than blindly betting on post-election stock gains. This marks an important reassessment of crypto asset valuation frameworks by traditional safe-haven logic, following shifts in macroeconomic liquidity expectations.
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