Is Bitcoin Too Cold, or Is Silver Too Hot? Bloomberg's Leading Strategist Sheds Light

Is Bitcoin Too Cold or Is Silver Too Hot? Bloomberg's Top Strategist Ends Speculation

Silver once again takes the lead as a speculative asset, while Bitcoin appears to be a quiet player awaiting a market shift. According to Mike McGlone from Bloomberg Intelligence, the Bitcoin-to-silver ratio is nearing its crucial 1,000x floor, a level reached during the market resets of 2018 and 2020. Presently, this ratio is under pressure due to the fact that U.S. stocks are well overdue for a correction.

Source: Mike McGlone

The S&P 500 remains nearly 10% above its 200-day moving average, with the market cap-to-GDP ratio sitting at historic highs. This unusual scenario is directing investments toward tangible assets like silver, while cryptocurrencies such as Bitcoin suffer from reduced capital flows.

In straightforward terms, while silver thrives in the current market environment, Bitcoin is experiencing a significant undervaluation. A chart contrasting BTC/XAG (Bitcoin to silver) and the U.S. market cap-to-GDP indicates this concerning divergence.

Key Warnings from McGlone

McGlone cautions that 2026 could present a different scenario than 2021. Silver's recent 100-week surge to 2.25 times its long-term moving average aligns with past instances of parabolic price surges, but this is occurring while Bitcoin lingers below its critical 1.0x threshold. This disparity indicates that metals and cryptocurrencies are operating at different levels of risk.

What’s the Baseline?

The soft-landing forecast suggests a possible retreat for silver towards $50 and a potential rebound for Bitcoin back to $50,000. However, this doesn't paint a bright picture for either asset—it serves as a sobering reality check. Although silver is currently outperforming, it's essential to remain cautious as its strong performance may be temporary, while Bitcoin's struggle could be unjust.

At this moment, silver is on the rise, but this could be fueled by emotional trading. Conversely, Bitcoin has remained relatively stagnant, which might signal that large institutional investors are biding their time to assess future market developments.