jakiro
Source: BitPush
After a slight rebound yesterday due to moderate inflation data, U.S. stocks fell sharply again on Thursday, which also seemed to drag down Bitcoin (BTC).As of the close of the day, the Nasdaq fell nearly 2%, while the S&P 500 fell 1.39%.Bitcoin has fallen below $81,000 after hitting nearly $85,000 the day before, down nearly 3% in the past 24 hours.
However, gold’s actual history has proven its hedging attributes, with spot prices hitting new highs, and at the time of writing, it’s just one step away from breaking through $3,000 per ounce for the first time.
The index has fallen nearly 15% since the Nasdaq peaked three weeks ago.During the same period, gold rose about 1%, and Bitcoin fell nearly 20%.
Familiar scenes
Gold’s current performance may remind everyone of the 2024 scene.At that time, cryptocurrencies and U.S. stocks were consolidating sideways, while gold hit a new high.Between March and October, Bitcoin fluctuated between $50,000 and $70,000, while gold rose nearly 40% to $2,800.With Trump’s election, Bitcoin soared to more than $100,000, and gold’s rally stagnated as funds flowed from safe-haven assets to risky assets.
Things will change over time.Gold ETFs recorded their largest inflows since the beginning of 2022 in the past 30 days, adding 3 million ounces of gold holdings, according to Bold.report.
By comparison, U.S. spot bitcoin ETFs have lost $5 billion since February, marking the worst outflow in a year, according to SoSoValue data.
Crypto market trading volume and futures activity both fell sharply.According to CoinDesk statistics, trading activity on centralized exchanges (CEX) is coming, with spot and derivatives trading volumes falling 20.6% to $7.20 trillion, the lowest level since October last year.
The Chicago Commodity Exchange (CME) Bitcoin futures trading volume also plummeted 20.3% to $175 billion, causing CME cryptocurrency trading to grow 19.9% overall to $229 billion.This is the first decline since May, consistent with the downward trend of the annualized basis of BTC CME.The annualized basis of CME fell to 4.08%, the lowest level since March 2023.
Bitcoin = Adolescent Gold?
This is not the first time that Bitcoin has left the definition of a safe-haven asset. During the market crash caused by the new crown epidemic in 2020, Bitcoin plummeted by more than 50% in two days.Despite this, the trend of digital gold has been repeatedly adjusted in recent years.
In particular, the Trump administration mentioned the risk-averse function of Bitcoin in its executive order and planned to establish a potential reserve of national Bitcoin.
The core of this view is that by reserving Bitcoin, financial instability can be hedged, similar to the logic of reserving gold and oil.
However, some people have a more rigorous attitude.Bloomberg intelligence analyst Eric Balchunas once compared Bitcoin to a “chili sauce” in investment, believing it can add some “flavor” to traditional stock and bond portfolios.Compared with other high-risk assets, what attracted him was “the narrative behind it about the depreciation of the dollar.”
“To me, Bitcoin is like gold in adolescence,” Balciunas believes.
Some market observers also pointed out that Bitcoin’s performance is overly beautified tech stocks, not digital gold.”If Bitcoin is considered equivalent to ‘digital gold’, then it should behave like gold,” the store president Nate Geraci said on the X platform.
Otherwise, this will strengthen the argument that Bitcoin is just a highly volatile asset.In my opinion, most cryptocurrencies are tech stocks, so for now they will continue to be affected by the sell-off of tech stocks.”
Balanced configuration
It is not surprising that gold’s performance supports Bitcoin. After all, gold has a decades-old history of wealth preservation and is a globally recognized safe-haven asset.By contrast, although Bitcoin has performed poorly recently, its long-term potential is still worth paying attention to.For investors who want to diversify investment risks, synchronous allocation may be an effective strategy.
The attractiveness of gold lies in its low volatility and as a tool of economic uncertainty.Data shows that gold’s long-term volatility last year was about 15%, while Bitcoin’s volatility was as high as 40%.
However, Bitcoin’s volatility has dropped significantly from nearly 100% a few years ago.As the market matures, the price trend of Bitcoin will further stabilize.
In addition, US spot ETFs have been launched for more than a year, and in many countries, Bitcoin is no longer considered an investable asset.Despite this, Bitcoin’s market position is gradually increasing.From initially banned by banks, to the rise of stablecoins, to the application of renewable energy in mining, and the launch of investable ETFs, Bitcoin has overcome the challenges step by step.
Regarding Bitcoin’s position in the current cycle, market analyst @AxelAdlerJr believes that you can focus on the BTC/gold ratio, which indicates how many ounces of gold a single bitcoin can buy.
Analysts believe that although the current macroeconomic outlook is unstable, gold prices are relatively stable.Judging from the highest experience in the previous cycle (36% drop), if the current increase in Bitcoin against gold is a total of 36% relative to the historical point (that is, it fell by 6% after falling by 30%, then this may focus on Bitcoin’s potential or is about to approach a phased bottom (local bottom) in this macro cycle, which may be a buy signal.
