As noted by prominent commodity trader Peter Brandt, Bitcoin, the leading cryptocurrency by market capitalization, has so far struggled to pull away from gold.
This is despite the fact that it has experienced a substantial increase in institutional adoption over the past year, with the success of Bitcoin ETFs being one of the biggest investment stories of 2024.
Brandt described the fact that Bitcoin has failed to significantly outperform gold as "very surprising."
Last week, the Bitcoin-gold ratio declined to the lowest level since early November. It it is now down more than 19% from a local peak of 41 ounces that was logged on Dec. 17.
In December, Brandt predicted that 89 ounces would be the "next stop" for the Bitcoin/gold ratio.
Meanwhile, gold is a hair's breadth away from hitting a new record high, currently trading at $2,827 per ounce. The yellow metal jumped to a new all-time high of $2,886 on Feb. 7. It has now surged by more than 11% since reaching a local bottom of $2,583 on Dec. 19.
Gold's overperformance might undermine the prevailing narrative about Bitcoin replacing the yellow metal as the key store of value. As reported by U.Today, several Bitcoin advocates, including former Meta executive David Marcus, have urged the U.S. government to sell its gold holdings in order to make room for a strategic Bitcoin reserve. Their core argument is that Bitcoin would be able to deliver far better returns based on its historical outperformance. However, the cryptocurrency has failed to break away from gold over the past four years.
Arman Shirinyan
Alex Dovbnya
Dan Burgin
Vladislav Sopov