Bitcoin and gold have registered in the recent few days. And as a result, in its August outlook, Bloomberg has reported that Bitcoin is stabilizing at six-times the price of an ounce of gold. This development comes after Bloomberg said that Bitcoin can become digital gold in near future.
They made the claims essentially due to the similar qualities in both the assets. It is notable that both gold and Bitcoin have a limited supply and a low growth rate. Now the company is also predicting that their can be a certain price ratio between both the assets.
“Stabilizing at about 6x the per-ounce price of gold, Bitcoin’s increasing correlation and declining volatility relative to the precious metal indicate an enduring relationship for price advancement, in our view. Unparalleled global central-bank easing should remain a tailwind for the quasi-currencies.”
Though it is still not clear that what can be the reason behind the mathematical relation of prices between the assets. But it this relationship does exist, the price of Bitcoin may appreciate to $18,000.
Bloomberg believes there is an on-chain indicator to back the idea that Bitcoin is currently undervalued:
“The 30-day average of addresses from Coinmetrics on Aug. 4 translated to a Bitcoin price above $14,000, vs. about $11,000 on an auto-scale basis since 2017.”