According to Bloomberg analyst Mike McGlone, Bitcoin's discount to hash rate has just reached levels not seen since the first quarter of 2020.
relative discount to its high hash rate in October — the largest since the first quarter of 2020 — could soon see Bitcoin return to"its propensity to outperform most assets.", the Bloomberg analyst suggested that Bitcoin's ever increasing hash rate — a measure of the processing power and security of a blockchain — relative to its price points"to risk/reward leaning favorably.
McGlone noted that such a large gulf between the price and the hash rate was last seen during the “1Q 2020 swoon" — a dip that preceded a meteoric climb that lasted through 2020 and 2021.Graph of Bitcoin hash rate and price. Source: Bloomberg Intelligence The Bloomberg analyst, known to be a perma bull, said that the high rash rates, along with rising demand, adoption and regulation means Bitcoin could be entering an"inexorable phase of its migration into the mainstream and at a relatively discounted price.
"Returning to its propensity to outperform most assets may be a matter of time, as mainstream adoption progresses and adaptive changes in US accounting standards give it a lift."Bitcoin’s price “should continue to rise over time” given the laws of supply and demand, adding that the cryptocurrency is showing signs of"bottoming" in 4Q 2022.
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