Key takeaways
Bitcoin’s price surged as Donald Trump, a pro-crypto candidate, won the U.S. presidential election.
The BTC/Gold ratio jumped 12%, marking its biggest single-day rise since February 2022.
The surge in BTC/Gold ration signals a rotation of investment from gold to Bitcoin, boosting expectations for Bitcoin’s continued price rally.
Bitcoin Outperforms Gold After Trump’s Election Win
Bitcoin saw a significant surge in value following Donald Trump’s victory in the U.S. presidential election. Following this rally, the BTC/Gold ratio rose by 12% on Wednesday, reflecting the highest single-day outperformance of Bitcoin relative to gold since February 2022.
This notable increase points to a growing shift in investor sentiment from traditional assets like gold to digital ones like Bitcoin.
Bitcoin/Gold Ratio – Source: TradingView
For months, gold has been the go-to safe-haven asset. However, this recent change indicates that many investors now consider Bitcoin a better hedge against economic uncertainties.
The election of a pro-crypto candidate like Trump has only heightened this trend. The investors seem confident that the regulatory environment under Trump will favor Bitcoin, further driving demand for the digital asset.
Analysts have pointed out that the BTC/Gold ratio has been in a downtrend since March. As Noelle Acheson, author of the Crypto Is Macro Now newsletter, noted , more focus will now be on Bitcoin.
“We could see some marginal rotation from gold to BTC, as well as new money flowing into the digital alternative,” added Acheson.
What’s Driving the Shift?
The shift from gold to Bitcoin is not only a result of Trump’s pro-crypto stance. The broader market performance also plays a key role.
Bitcoin’s price rally has been building momentum as investors increasingly view it as a store of value. Meanwhile, gold has started losing its bullish edge due to rising interest rates under the new administration, which could dampen the metal’s appeal.
“Analyzing the BTC to gold ratio, we can see that the downtrend [indicative of gold’s outperformance since March] is starting to reverse,” Acheson explained.
Moreover, Trump’s presidency is expected to bring more regulatory clarity for the digital asset space. Speculation has even surfaced that the administration could build a strategic Bitcoin reserve.
Gold vs. Bitcoin: The Future Outlook
While Bitcoin is gaining ground, the future of gold remains uncertain. Much of gold’s appeal comes from its status as a safe-haven asset during times of economic instability.
However, with Trump in power and interest rates set to rise, gold allure could fade, which could shift the focus to BTC. The largest cryptocurrency is trading at around $75,400, with a 24-hour gain of 2%.
As more investors turn to digital assets, Bitcoin’s dominance is expected to increase. Currently, Bitcoin’s dominance is at 58.9%, while the Fear and Greed index is at 70 (Greed), which indicates a strong bullish sentiment.
If BTC can push slightly beyond its present momentum, it could continue outperforming gold in the coming months.
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Rida is a dedicated crypto journalist with a passion for the latest developments in the cryptocurrency world. With a keen eye for detail and a commitment to thorough research, she delivers timely and insightful news articles that keep her readers informed about the rapidly evolving digital economy.
View all articles by Rida Fatima
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