Analysts See Bitcoin Rising as Gold Rally Fades

The price of gold has fallen significantly after reaching a record high. Some experts believe that now is the time for Bitcoin, as investors reallocate capital. A comparison of Bitcoin and gold reveals opportunities.

The US budget freeze remains in place, and the trade conflict with China remains unresolved. This tricky situation has driven investors toward the precious metal, which reached a new all-time high of around $4,350 per troy ounce on Monday.

But now, several analysts predict, is the time for Bitcoin, after the gold price plummeted by 5 percent on Tuesday – the biggest price drop for the precious metal in five years. Profit-taking on gold could therefore be shifted to Bitcoin, because it offers greater profit opportunities in addition to protection against inflation.

Trump’s game with punitive tariffs plays into the hands of Bitcoin and gold

In fact, the gold rally had already begun in April, when US President Donald Trump floated punitive tariffs as a political tool. Bitcoin reacted with significant losses at the time and only later was able to confirm its role as “digital gold.” Bitcoin’s previous peak was reached two weeks ago, when BTC reached an all-time high of just over $126,000. But Bitcoin has since fallen back to prices below $110,000, which many consider a “bottoming out.” Is this a level from which Bitcoin will take off and gold will again lose market share?

Analyst Joe Consorti writes on X that comparing the price charts of gold and Bitcoin shows “an early phase of aggressive catching-up.” By the end of the year, capital will increasingly be invested with risk to profit from political uncertainty, according to Consorti.

Other experts, such as Charlie Morris, founder of ByteTree, point to November 2024 and October 2023, when Bitcoin also caught up with gold’s price gains by a few weeks. “The good news for Bitcoin is that gold will run out sooner or later,” Morris said a few weeks ago.

Study: Shifting gold capital towards Bitcoin has potential

Comparing gold and Bitcoin has a long history. However, Deutsche Bank noted in September that Bitcoin’s price fluctuations are decreasing, and as a result, BTC is beginning to resemble gold more and more clearly.

In this context, a recent study by Bitwise is attracting considerable attention: It calculates that only 3 to 4 percent of the $17 trillion gold market would need to be shifted to Bitcoin to nearly double the BTC price to $200,000.

Conclusion: Bitcoin has good prospects when gold weakens

Bitcoin ETFs in the US recorded nearly $500 million in capital inflows yesterday, Tuesday, signaling a turnaround after four trading days in the red.

This supports the theory that gold’s profit opportunities are largely seen as exhausted and that Bitcoin is now returning to the spotlight as an alternative. However, this is still only a snapshot in time, where gold has tested its price limits and Bitcoin faces the challenge of proving its strength.

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(Featured image by Kanchanara via Unsplash)

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