During economic uncertainty, gold appears more appealing than Bitcoin
Gold’s stability compared to Bitcoin is seen as advantageous during uncertain market conditions, according to Maruf Yusupov, the co-founder of the gold-backed stablecoin Deenar. Yusupov highlighted the ongoing uncertainty surrounding a potential Interest Rate cut from the US Federal Reserve as a key factor influencing the current Bitcoin trend.
The recent drop in Bitcoin’s price below $60,000 on September 15 has sparked concerns among investors about a possible downturn. In contrast, gold has been experiencing a consistent upward trend, making it a more appealing investment option due to the prevailing cautious sentiment among investors amid general uncertainty, as noted by Yusupov.
Gold’s value saw a marginal increase of 0.04% and was trading at $2,584 at the time of reporting, based on data from Trading Economics. Gold even reached a record high of $2,589 recently, while Bitcoin struggled around the $58,000 level, down by 22% from its all-time high of $73,750.
Spot BTC exchange-traded funds have now surpassed $61 billion in total assets under management, accounting for 25% of the $257 billion in assets under management held by gold ETFs in just six months. Recent market turbulence and mixed sentiments regarding the anticipated US Fed rate cut have led to increased outflows, with even BlackRock joining the trend of moving funds out.
Yusupov emphasized that the limited volatility of gold has made it an attractive option for investors seeking to hedge against underlying uncertainties in the market. While it may be premature to conclude that traditional investors are shifting towards gold, market data appears to support this notion.
Bitcoin experienced a slight decrease of 0.24% in the past 24 hours, with its current trading price at $58,500. The overall cryptocurrency market cap has declined by 1.2%, currently standing at $2.13 trillion, according to CoinGecko.
The downward movement in Bitcoin’s value coincides with varying reactions to the expectations surrounding a potential 50 basis point rate cut by the US Federal Reserve. This uncertainty has contributed to the ongoing market fluctuations and investor sentiment.
In conclusion, the contrasting performance of gold and Bitcoin amid market uncertainties underscores the importance of understanding the dynamics of different asset classes and their roles in investment strategies during volatile times.
