Technical and fundamental support for Bitcoin is growing — possibly at the expense of gold.
A number of indicators suggest that Bitcoin (BTC) is pushing aside gold as the premier safe-haven asset. This could set the stage for wider mainstream adoption of the digital currency, according to Mike McGlone, a senior commodity strategist at Bloomberg.
McGlone tweeted Monday that the battle between the safe havens is beginning to favor Bitcoin, based on technical and fundamental indicators. He explained:
“Gold will always have a place in jewelry and coin collections, but most indicators point to an accelerating pace of Bitcoin replacing the metal as a store of value in investor portfolios.”
Digital #Gold Pushing Aside the Old Guard –
Gold will always have a place in jewelry and coin collections, but most indicators point to an accelerating pace of #Bitcoin replacing the metal as a store of value in investor portfolios. pic.twitter.com/RR0CCWmksF
— Mike McGlone (@mikemcglone11) March 8, 2021
The chart accompanying the tweet shows Bitcoin’s strong outperformance versus gold since mid-2020, while total known holdings of gold ETFs have declined. In other words, it appears that Bitcoin is gaining traction among institutional investors at the expense of gold. The chart also highlights a sharp decline in Bitcoin’s volatility relative to that of gold.
McGlone has long argued that Bitcoin would ultimately become the preferred safe haven of investors as the “digital gold” narrative continues to gain traction. In early February, the Bloomberg strategist predicted that BTC would quickly reach $50,000 as investors move funds out of bullion and into the digital asset. The flagship cryptocurrency hit $50,000 less than two weeks later.
In November 2020, McGlone also predicted that Bitcoin could reach $170,000 over the next two years before consolidating like gold.
So far this year, the haven battle between gold and Bitcoin has strongly favored BTC. As of Monday, 1 Bitcoin was worth 30.3 ounces of gold. The ratio peaked at 32.1 in February, according to MarketWatch data.
The BTC spot price is currently trading above $51,100, up 1.3% on the day. Gold, meanwhile, is down 0.9% at $1,683 per troy ounce on the Comex division of the New York Mercantile Exchange.