Bitcoin’s relationship with gold is one of the key points for the consistency of the largest cryptomeda.
The Bitcoin community on Twitter is celebrating this Tuesday, January 5th, a new milestone for cryptomeda: for the first time, a ton of gold has reached the mark of only 2,000 BTC.
The first Twitter profile to spread the new milestone was @VersusBTC, which compares the Bitcoin and gold markets. The profile posted:
This is not the first Bitcoin milestone noted during the brief 2021 rally, which took the largest cryptomoeda from $29,000 to $34,000.
On January 2nd, the market value of Bitcoin reached 5% of the capitalization of Gold for the first time in history, as it also posted the Twitter profile:
The correction of Bitcoin in the days after January 2nd caused the percentage of cryptomeda capitalization to fall again below 5%. On Tuesday, BTC’s capitalization represents on average 4.79% of gold.
At the moment, gold is quoted at about US$ 1,264, while Bitcoin has a day of recovery, beating the US$ 33,125 in the early afternoon of today, time of Brasilia (BRT), according to data from Cointelegraph Markets.
The correlation between Bitcoin and gold has been closely followed by the cryptomorph markets, as gold reserve properties are often compared to Bitcoin, for many a kind of „digital gold“.
Throughout 2020, the two assets maintained some degree of correlation and were pointed out by experts as two assets of economic protection during the global economic crisis. The correlation would only be broken with the exponential Bitcoin rally as of September last year.
As reported by Cointelegraph Brasil this Tuesday, the relationship between gold and Bitcoin is also fundamental for sustaining Bitcoin’s rise, as JPMorgan researchers pointed out. In a study revealed by Bloomberg, they defended:
„The market capitalization of Bitcoin of about US$ 575 billion would have to increase 4.6 times – based on a theoretical price of US$ 146,000 – to correspond to the total private sector investment in gold through exchange-traded funds or bars and currencies,“ wrote strategists led by Nikolaos Panigirtzoglou in an article. But this perspective depends on Bitcoin converging with gold volatility to encourage more institutional investment, a process that will take some time, they argued.