Markets

Bitcoin vs Gold – Which Store of Value Has the Upper Hand?

Bitcoin prices have fallen to their lowest levels since mid-March. However, the asset held its stock of valuable real estate, outperforming gold by a large margin this year.

Cross-chain analytics company Glassnode compares Bitcoin prices to gold prices. Moreover, the spot price of bitcoin is equivalent to 13.3 ounces of gold, up 46% year-on-year.

Bitcoin vs Gold – The battle is on

Additionally, Bitcoin has outperformed gold by a staggering margin of about 430% since the COVID-19 low in March 2020.

Bitcoin vs gold ratio. source: glass

The data indicates that Bitcoin is still considered a store of value, despite its current price volatility.

Since the beginning of 2023, the value of bitcoin has increased by 51.6%. If this year’s peak price is calculated in mid-April, this increase will be twofold in value.

By comparison, gold prices are up just 6.2% year-to-date. Gold is currently trading at $1940 an ounce, down 5% from its all-time mid-April high of $2040 an ounce.

However, the most volatile bitcoin is in an even worse position, losing 63.7% from its all-time high of $69,000 in November 2021.

The takeaway is that both are excellent stores of value or safe havens, with gold slow and steady and BTC more of a roller coaster ride.

On the contrary, the value of the US dollar has fallen dramatically over the past few years due to high levels of inflation. according to inflation tool Data, cumulative inflation from 1956 to 2022 is 976%. This means that $100 then equals roughly $1,000 now.

Inflation in America is currently at 4% after being down from over 9% this time last year due to interest rate hikes by the Federal Reserve.

On June 14, the Fed announced that it would pause interest rate hikes for the month. This is the first such suspension since it began being lifted in March 2022 in response to accelerating inflation.

Bitcoin prices drop to a three-month low

Bitcoin reacted poorly to the Fed’s announcement and increasingly negative market sentiment amid the US crypto crackdown.

BTC fell to a three-month low of $24,879 a few hours ago in the early hours of June 15th.

The asset has recovered to hover above the $25,000 level at the time of writing but is looking increasingly bearish.

BTC/USD 24 Hours - BeInCrypto
BTC/USD 24 Hours – BeInCrypto

BTC exited the long-term consolidation channel and found support at current levels. A break below this level could see further support at $23,600, where it bounced several times in January and February.

Disclaimer

Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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