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This Bitcoin ratio is close to its 2021 ATH and why it matters?

March 19, 2024
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This Bitcoin ratio is close to its 2021 ATH and why it matters?
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  • The BTC/Gold correlation remained weak at press time.
  • Bitcoin surpassed Gold in investors’ portfolio allocation when adjusted for volatility.

Bitcoin’s [BTC] proponents have long pitched it as a global store of value, assuring investors guaranteed returns over some time, irrespective of the state of the broader financial market.

Well, 2024 might be the year that dramatically strengthens this narrative.

Digital Gold vs. Real Gold

The Bitcoin to Gold ratio has risen sharply since the start of the year, and was moving closer to the all-time high (ATH) clocked during the peak 2021 bull market, according to crypto market data provider Kaiko.

The ratio, which measures the relative performance of the two assets, underlined that the “Digital Gold” outperformed its real-world counterpart.

Bitcoin to Gold Ratio

Source: Kaiko

The world’s largest cryptocurrency has been bolstered by the launch of spot exchange-traded funds (ETFs) in the U.S. this year.

According to AMBCrypto’s analysis of SoSo Value data, inflows into spot ETFs have hit $12 billion since their listing in January.

The soaring demand sent Bitcoin past its ATH earlier this month, and more than 50% higher since the start of the year.

On the other hand, the yellow metal could just grow 4.71% year-to-date (YTD), although it also hit its peak of $2,179 per ounce recently.

Moreover, unlike Bitcoin, physically-backed Gold ETFs have witnessed net outflows of late, as per World Gold Council.

Is Bitcoin replacing Gold in portfolios?

Kaiko further highlighted the lack of a mutual relationship between the two asset classes.

The 60-day BTC/Gold correlation oscillated between a positive 0.15 and a negative 0.15 for most of the last decade. This implied that factors affecting the demand for the two varied significantly.

See also  Bitcoin mining expansion in U.S. at risk as tariffs hit equipment imports

If the correlation stays weak, Bitcoin spot ETFs could emerge as a viable alternative to Gold investments.

Bitcoin correlation with Gold

Source: Kaiko


Read Bitcoin’s [BTC] Price Prediction 2024-25


JPMorgan analyst Nikolaos Panigirtzoglou recently stated that Bitcoin has already surpassed Gold in investors’ portfolio allocation when adjusted for volatility.

This suggested a potential rotation of capital from Gold to Bitcoin.

Previous: Blackrock doubles down on crypto with new digital asset fund
Next: Ethereum NFTs Exposed: Is the BAYC Hype Train Derailing?

READ ALSO

Bitcoin nears $91K as buying pressure soars, but challenges emerge

Spot Bitcoin ETF Options – How U.S exposure is set to soar after CFTC’s notice

  • The BTC/Gold correlation remained weak at press time.
  • Bitcoin surpassed Gold in investors’ portfolio allocation when adjusted for volatility.

Bitcoin’s [BTC] proponents have long pitched it as a global store of value, assuring investors guaranteed returns over some time, irrespective of the state of the broader financial market.

Well, 2024 might be the year that dramatically strengthens this narrative.

Digital Gold vs. Real Gold

The Bitcoin to Gold ratio has risen sharply since the start of the year, and was moving closer to the all-time high (ATH) clocked during the peak 2021 bull market, according to crypto market data provider Kaiko.

The ratio, which measures the relative performance of the two assets, underlined that the “Digital Gold” outperformed its real-world counterpart.

Bitcoin to Gold Ratio

Source: Kaiko

The world’s largest cryptocurrency has been bolstered by the launch of spot exchange-traded funds (ETFs) in the U.S. this year.

According to AMBCrypto’s analysis of SoSo Value data, inflows into spot ETFs have hit $12 billion since their listing in January.

See also  US Government Dumped 9,800 Bitcoin From Silk Road Saga, Plans To Sell 41K BTC In 2023

The soaring demand sent Bitcoin past its ATH earlier this month, and more than 50% higher since the start of the year.

On the other hand, the yellow metal could just grow 4.71% year-to-date (YTD), although it also hit its peak of $2,179 per ounce recently.

Moreover, unlike Bitcoin, physically-backed Gold ETFs have witnessed net outflows of late, as per World Gold Council.

Is Bitcoin replacing Gold in portfolios?

Kaiko further highlighted the lack of a mutual relationship between the two asset classes.

The 60-day BTC/Gold correlation oscillated between a positive 0.15 and a negative 0.15 for most of the last decade. This implied that factors affecting the demand for the two varied significantly.

If the correlation stays weak, Bitcoin spot ETFs could emerge as a viable alternative to Gold investments.

Bitcoin correlation with Gold

Source: Kaiko


Read Bitcoin’s [BTC] Price Prediction 2024-25


JPMorgan analyst Nikolaos Panigirtzoglou recently stated that Bitcoin has already surpassed Gold in investors’ portfolio allocation when adjusted for volatility.

This suggested a potential rotation of capital from Gold to Bitcoin.

Previous: Blackrock doubles down on crypto with new digital asset fund
Next: Ethereum NFTs Exposed: Is the BAYC Hype Train Derailing?
Tags: ATHBitcoinClosemattersratio

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