In a recent with interview, Mike McGlone, a Senior Commodity Strategist at Bloomberg Intelligence (Bloomberg’s research arm on the Bloomberg Terminal”), shared his thoughts on gold and Bitcoin.

McGlone’s comments were made during an interview with BBN Bloomberg on October 19, the day that shares of the first bitcoin-linked ETF in the United States, i.e. ProShares Bitcoin Strategy ETF (NYSE: BITO) started trading.

On October 18, ETF provider ProShares issued a press release, which said that BITO will “offer investors an opportunity to gain exposure to bitcoin returns conveniently, through a brokerage account” and that BITO “can be bought and sold like a stock and eliminates the need for an account at a cryptocurrency exchange and for a crypto wallet.”

ProShares CEO Michael L. Sapir stated:

We believe a multitude of investors have been eagerly awaiting the launch of a bitcoin-linked ETF after years of efforts to launch one. BITO will open up exposure to bitcoin to a large segment of investors who have a brokerage account and are comfortable buying stocks and ETFs, but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider and creating a bitcoin wallet or are concerned that these providers may be unregulated and subject to security risks…

BITO will continue the legacy of ETFs that provide investors convenient, liquid access to an asset class. 1993 is remembered for the first equity ETF, 2002 for the first bond ETF, and 2004 for the first gold ETF. 2021 will be remembered for the first cryptocurrency-linked ETF.

With regard to ProSharess’ Bitcoin futures ETF, McGlone had this to say:

I think it’s more symbolic of the trend is your friend, and it’s friendly for cryptos and Bitcoin. This is something that’s been long overdue. It’s just happening, but it’s the iterations that trickle down from here that really matter.

Number one, it means more demand for Bitcoin, not necessarily from the futures, but maybe from the traders doing the arb and buying the physical to hedge against the futures that are involved in this ETF because typically commodities that track futures have a bad correlation with actually tracking that underlying commodity.

So I’m not so bullish about this actually ETF, but I think it’s going make people realise what are the next iterations — Ethereum ETFs in the U.S. And then eventually, I think it’s going all cumulate with an ETF that tracks a broad-based index … like the Bloomberg Galaxy Crypto Index. And the bottom line is the US is just catching up to Canada in ETFs.

Although McGlone still likes Bitcoin as a portfolio diversifier, he believes that if it were not for Bitcoin, its price would be a lot higher today since for millennials living in an increasing digital world Bitcoin is more interesting than gold:

The trend is unfavorable for gold. It’s a fact that Bitcoin is basically becoming like a giant Pac-Man. It’s sucking assets from all asset classes. It’s trickling into bonds now… but the key area it started with is gold, and I expect it to accelerate.

Now I’m not bearish on gold, but I think gold would be much higher. The fact is Bitcoin’s their new digital version in a world that’s going digital. Millennials don’t really want gold.


The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.


Featured Image by “Donbrandon” via Pixabay