It seems that the financial markets currently lack sufficient funds to support simultaneous bullish trends in both gold and its digital equivalent, Bitcoin.
Recently, gold has been reaching what appear to be new record highs almost daily. On the other hand, Bitcoin, despite being influenced by similar positive factors such as relaxed monetary policies, ETF investments, and increased corporate acceptance, hasn’t managed to gain significant momentum.
This pattern indicates that Bitcoin might not experience a sustained upward trend until investors start losing interest in gold.
Interestingly enough, on Wednesday gold experienced a rare decline of 1.5% down to $3,759 per ounce, potentially “making room” for Bitcoin’s uncommon rise of 1.7% reaching $113,7000.
A broader perspective reveals another narrative
Although it appears that gold and Bitcoin are moving in opposite directions at this point in time, logic suggests that both assets should generally follow similar trends over extended periods due to their roles as safeguards against excessive government expenditure and inflation.
This assumption holds true when looking at the bigger picture. So far this year, gold has risen by 42% surpassing Bitcoin’s 22% increase yet demonstrating an overall upward movement for both assets. Since early 2024, gold has appreciated by just 82% compared with a remarkable 155% surge for Bitcoin.
Moreover since the beginning of 2023, while gold has more than doubled its value (a notable achievement indeed) ); Bitcoin has skyrocketed over six times its worth (though starting from near the bottom during crypto winter of late-2022).