Key Points:
- Following a strong surge in recent months, gold prices have faced a downturn of nearly 10% in recent sessions.
- In contrast, Bitcoin has surged toward the $100,000 mark.
- According to an analyst, Bitcoin is now seen as a more effective hedge compared to gold amidst strategic asset reallocations.
What may have appeared to be a peak for gold prices last week has given Bitcoin an opportunity to thrive, a trend that could continue.
After reaching record highs post-President Trump’s tariffs in early April, the price for gold surged.
The price of gold peaked over $3,500 per ounce on April 21, while Bitcoin hovered around $87,000 at that time, which was relatively stable since the tariffs but down about 20% from its peak earlier this year.
Recently, gold’s price has dropped to just above $3,200 per ounce, while Bitcoin has seen a 10% rise to a two-month high of $97,000.
“I believe Bitcoin serves as a better hedge than gold during shifts in asset distribution outside the U.S.,” Geoff Kendrick from Standard Chartered remarked.
Kendrick also observed that the ETF inflow dynamics have shifted, with a significant influx into Bitcoin funds outpacing that for gold funds.
In fact, the previous time Bitcoin ETF inflows exceeded those into gold by such a significant margin was during the U.S. presidential elections. Following that, Bitcoin’s price increased by over 40%, surpassing the $100,000 threshold.
