Bitcoin’s price surged by 12% as gold declined, marking the biggest single-day rise in the BTC/Gold ratio since February 2022. This shift in the market suggests a potential rotation of money from gold to bitcoin, indicating a renewed uptrend for the leading cryptocurrency.
The uptrend in bitcoin’s price is attributed to factors such as rising stablecoin liquidity and increased bitcoin transactions, leading to the formation of an “Uptober” trend. Despite bitcoin being up 40% year-to-date, when adjusted for risk, it has underperformed gold. However, recent developments show that bitcoin broke the $64,000 mark while gold saw a surge in its price.
The ETH/BTC ratio also slid to its lowest level since April 2021, indicating a shift in market dynamics favoring bitcoin over other cryptocurrencies. A recent report from CoinDesk suggested that the ongoing rally in bitcoin’s price is expected to continue, with projections of reaching $80,000 and higher by the end of the year.
The recent surge in bitcoin’s price to record highs above $76,000 coincided with the victory of pro-crypto Republican candidate Donald Trump in the U.S. presidential election. In contrast, gold experienced a 3% decline to $2,658, highlighting the divergence in performance between the two assets. As a result, the BTC/gold ratio surged by 12% on Wednesday, signaling bitcoin’s outperformance relative to gold.
The breakout in the BTC/gold ratio confirmed the end of an eight-month downtrend, indicating a shift in investor sentiment towards bitcoin. Analysts suggest that investors are reallocating their funds from gold to bitcoin, driven by factors such as hedging against currency debasement and capitalizing on the market dynamics under the Trump administration.
The expected regulatory clarity for the digital asset industry and increased institutional adoption of bitcoin are also contributing to its positive outlook. There are speculations that the Trump administration could even consider building a strategic bitcoin reserve, further bolstering the cryptocurrency’s position.
On the other hand, gold’s future performance will likely be influenced by expectations of elevated interest rates under the Trump presidency, which could diminish its appeal to investors. The evolving market dynamics point towards a continued uptrend for bitcoin, with the potential for further price growth and outperformance relative to gold in the coming months.
