Bitcoin Price Decline and Gold-BTC Ratio Insights

Bitcoin is considered digital gold. Yesterday, the Bitcoin price dropped by around 6.37%, marking the most severe decline since the March 3 decrease of 8.53%. Currently priced at $82,362.27, the BTC market struggles to recover from this correction. Bloomberg Economics’ analysis of the gold-to-BTC ratio offers insights into the future of the gold-BTC market.

Current Gold Prices

Gold is currently priced at $2,909.42, leading to a gold-to-Bitcoin ratio of 0.034. This analysis indicates a potential sharp shift in the gold-to-BTC ratio soon.

Gold-to-Bitcoin Ratio Trends

A drop in the gold-to-BTC ratio indicates that gold’s price has decreased in comparison to BTC’s price. The gold-to-BTC ratio was close to the current level in early March 2024, peaked at 0.047 in early September, and fell to 0.029 in late November, when favorable conditions emerged for the crypto industry. At the start of this year, it was approximately 0.028, and in late January, it dropped to 0.026. However, in February, the ratio witnessed consistent growth, peaking at 0.035.

Noteworthy is the fact that during this peak in February, the BTC market experienced a significant drop of 17.5%. Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, suggests a possible decline in the gold-to-BTC ratio in the near future. He tweeted that the ratio, which stood at around 28x on March 9, could drop toward 21x, primarily if the US stock market reverses its near $12 trillion from last year.

Potential Bitcoin Growth Over Gold

McGlone’s outlook implies that Bitcoin may become more valuable than gold soon. Recent S&P 500 performance, which has fallen by 4.87% in the last month, with a drop of over 3.50% just in the past week, supports this thesis. Year-to-date performance of the S&P 500 stands at 1.68%.

In conclusion, Bloomberg’s analysis posits that Bitcoin may gain more value relative to gold in the upcoming days, particularly if the US stock market continues to decline, thereby showcasing Bitcoin’s potential strength.