• Bitcoin and gold are among the top long-term beneficiaries of the stock market’s volatility

  • Mike McGlone said the situation had provided indications of divergent commodity strength amid the decline in key U.S. stock market indices.

    McGlone noted on Twitter that Bitcoin and gold are emerging as long-term beneficiaries of the situation.

    Simultaneously, McGlone stated that crude oil has emerged as the leading commodity divergent. Crude oil is in position to recover from the 2020 drop that resulted from the coronavirus pandemic.

    “The arousal of one of the world’s most powerful forces — the declining US stock market — is providing some early indications of divergent commodity strength, and crude oil is at the top of the list. “We see gold, Bitcoin, and US T-bonds as the top long-term beneficiaries,” McGlone said.

    Notably, when the stock market is in a correction, broad prices show divergent strength, which is a key determinant for a commodity recovery. However, McGlone made no mention of the impact on these commodities once equity prices start to rise.

    Outflows from traditional investment products

    According to the strategist, traditional investment products are increasingly seeing outflows. He observed that investors were abandoning commodities such as gold in favor of cryptocurrencies such as Bitcoin and Ethereum.

    Initially, McGlone predicted that digital assets such as Bitcoin would continue to rise and could reach $100,000 by the end of the year.

    The stock market has experienced increased volatility in recent days. Overall, the US stock market began the week in the red zone as investors remained on the sidelines due to a variety of factors such as the Fed’s next move on monetary stimulus.

    The Federal Reserve’s decision to maintain monetary stimulus policies, on the other hand, has resulted in the market containing the losses. In general, stocks have struggled so far in September, as has been the case in the past.

    What's your reaction?