The rise of digital currencies like Bitcoin (#BTC☀ ) has shifted the perspective on gold as a traditional store of value. While gold and #bitcoin☀️ have different risk profiles and correlations, many investors are leaning towards BTC, primarily due to its potential for high returns.
Different Views on Bitcoin and Gold
Opinions on the comparison of these two assets vary. For instance, financial expert Robert Kiyosaki recommends investing in both, while precious metals analyst Peter Spina claims that Bitcoin as "digital gold" has failed.
Both investments experienced significant price fluctuations in 2024. Currently, BTC is trading at $66,640, marking a year-to-date increase of 57.88%, although the price has been volatile in recent weeks. Bitcoin repeatedly attempts to break through the $70,000 barrier but has so far been unsuccessful.
BTC price YTD chart. Source: Finbold
In contrast, gold, which has risen by 32.69% since the start of the year, has enjoyed much smoother growth and is in a two-year bull run, which is expected to deliver record returns in 2024.
Gold YTD price chart. Source: TradingView
Gold-to-Bitcoin Ratio Shows Gold's Strength
A simple way to compare Bitcoin and gold's performance is by using the gold-to-Bitcoin ratio. If this ratio rises, Bitcoin is outperforming gold, and if it falls, the opposite is true. This ratio has been declining since March, as noted by commodities strategist Mike McGlone.
In 2021, this ratio peaked at 37, with a smaller peak of 34 in March 2024. Currently, one Bitcoin is equivalent to about 24 ounces of gold, and with Bitcoin struggling while gold reaches new highs, the ratio is expected to drop further.
Risk Assets Facing Headwinds
A key point, as highlighted by McGlone, is that the strong performance of the S&P 500 this year hasn't been able to lift Bitcoin. This suggests that risk assets like Bitcoin may face challenges going forward. Despite Bitcoin's high potential returns, the narrowing gap between Bitcoin and gold, along with Bitcoin's volatility, reinforces gold's role as a safe haven investment.
#GOLD_UPDATE , #GoldVsBitcoin , #CryptoNewsCommunity
Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“
