Bitcoins Digital Gold Narrative Falls Apart As BTC Crashes To $60K While Real Gold Shines
Bitcoin is often touted as the ultimate store of value by its propounders; a digital version of gold that maintains all the best characteristics as an inflation hedge while being more efficient and liquid thanks to its underlying blockchain technology, which the Bitcoin protocol pioneered.
However, as crypto faces a major correction, which has seen Bitcoin slump to the $60,000 level, faith in this paradigm is being tested. Indeed, when compared to gold, BTC is down roughly 11% on the week. The yellow metal, in contrast, has soared to an all-time high.
Old-Fashioned Gold Is Outperforming Its Digital Version
If digital gold means a safe-haven asset where investors park their money during global economic uncertainties and geopolitical strife, then the worlds largest crypto by market cap doesnt fit the bill as well as it used to.
At press time, Bitcoin is changing hands for $60,504 and is down 17.8 percent from its March all-time price high of $73,737.94. Meanwhile, the precious metal set a new record high near $2,500 on Friday. An ounce of gold was changing hands at $2,442 as of press time.
As Bitcoins performance starkly contrasts gold, observers are questioning whether the top cryptos status as a form of digital gold still rings true. The latest downturn for BTC came in tandem with a punishing global stock market rout, with the Nikkeis 6% slide setting the scene for more losses on Wall Street. An astonishingly bad US jobs report further exacerbated the sense of panic.
This correlation with equity markets indicates that BTC is firmly behaving like a risk asset at the moment not the safe haven its fans have often touted it to be.
Looking Ahead
Jeff Ross, the founder and managing director of hedge fund Vailshire Partners, predicted that increasing global liquidity could fuel Bitcoins price in the future.
Ross shared a chart on his X account, comparing the global M2 money supply to BTC/USD and the latters 50-week and 200-week simple moving averages (SMAs).
A reverse head-and-shoulders forming for bitcoin (on the weekly chart) in the setting of increasing global M2 money supply? Would be uber bullish from a combined TA and liquidity perspective, Ross explained.
Meanwhile, the journey ahead for Bitcoin remains complicated, with a set of catalysts, including a dovish Federal Reserve policy, increased adoption by institutional investors, favorable regulatory developments, and technological advancements, likely influencing its ability to hit new price milestones this year.
Text source: ZyCrypto
