Bitcoin Faces Potential 50% Decline Against Gold Due to '5-Year Curse'

Mike McGlone, a senior strategist at Bloomberg, warns that Bitcoin's impressive run may be losing steam, potentially leading to a significant value drop against gold. The Bitcoin-to-gold ratio has plummeted sharply, raising concerns among investors and experts.

Key Takeaways

Mike McGlone highlights a possible 50% decline in Bitcoin's value compared to gold.
The Bitcoin-to-gold ratio recently fell to 20.18, reminiscent of five years ago.
A “5-Year Curse” is identified as a concern for Bitcoin's long-term value.
Failure to break above $100,000 in 2025 may indicate a bearish trend.
Increased equity risks could negatively impact speculative cryptocurrencies.

Bitcoin Faces Potential 50% Decline Against Gold Due to '5-Year Curse'

Understanding Bitcoin's Recent Struggles

According to Mike McGlone, Bloomberg's senior strategist, Bitcoin's decade of growth may be transitioning into a period of stagnation. The recent Bitcoin-to-gold ratio, represented by the XBT/XAU chart, has fallen to 20.18, mirroring levels from five years ago.

After reaching a peak of 40 in late 2024, this benchmark has been nearly cut in half, rekindling fears of a drop to the 10 range, which hasn't been observed since the lowest points of the crypto market's most trying times.

McGlone has issued warnings about this trend for months. His primary argument is that Bitcoin experienced massive growth post-2020, primarily fueled by liquidity-driven speculation, and that this inflated momentum is now retracting.

McGlone's Viewpoint
Source: Mike McGlone

In this scenario, the notion of the "5-Year Curse" serves as a cautionary tale for macro investors who still believe in Bitcoin as digital gold, given that its value has remained largely unchanged over the past five years. According to McGlone, the most likely outcome now is a drop back down to 10, equating to another 50% fall for Bitcoin relative to gold.

This situation isn't merely theoretical in dollar terms. McGlone points out that Bitcoin's annual chart reflects a struggle to surpass the $100,000 mark in 2025, alongside a drop below the 200-day moving average and a modest rebound expected in early 2026. These indicators point towards a possible downward trend.

He suggests that this could lead to a full mean reversion, with a baseline retracement around $50,000 and a potential overshoot down to $10,000, especially if risk assets begin to deflate following inflationary trends.

Throughout the last ten years, Bitcoin has shown correlation with a rising S&P 500 and historically low volatility. However, the volatility index has remained subdued since late 2022, and McGlone warns that an uptick in equity risk could trigger substantial declines in speculative cryptocurrency values.

Ultimately, McGlone's analysis indicates that Bitcoin's trajectory against gold is no longer bullish but displays a symmetrical pattern. In this context, symmetry could suggest another 50% decline before stabilization occurs.