Bitcoin’s rally outpaces gold in start of the new year
Bitcoin has not only started the new year with a rally, its gains have outpaced those of gold. That’s reversed — at least temporarily — part of the 76% decline in the Bitcoin-to-gold ratio over 12 months through November, a period during which the cryptocurrency tumbled into a bear market, as per Bloomberg. The gauge actually found a low two months ago and drifted sideways, taking support at resistance formerly seen in 2018 and 2019. The jump so far in 2023 signals that the barrier has now turned into a significant support area, reported Bloomberg.
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Bitcoin and a gauge of the top 100 tokens have both jumped more than 20% this year, alleviating at least a sliver of last year’s digital-asset rout. Much of that has been driven by the view that debilitating interest-rate hikes are coming to an end as inflation cools. Cryptocurrencies have shed about $2 trillion since a peak in November 2021. The crypto sector also continues to grapple with the fallout of the collapse of the FTX exchange.
However, this week, Bitcoin extended declines after snapping a rare 14-day winning streak as a mood of caution supplanted the risk appetite that drove up a variety of assets at the start of the year.
Meanwhile, gold prices have shot above $1,900 an ounce, surging by about 18% since early November as inflationary pressures recede and markets anticipate less aggressive monetary policy from the US Federal Reserve. The price of the previous metal is expected to rise towards record highs above $2,000 an ounce this year, albeit with a little turbulence, as the United States slows the pace of rate hikes and eventually stops increasing them, as per a Reuters report.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.