After expressing a bullish performance in the recent few weeks, the world’s leading digital currency has decoupled from gold. Market analysts believe Bitcoin could perform better than gold and is able to gain the market cap of $9 trillion.
Correlation Between Both Has Ended
In the last quarter of 2020, the flagship digital currency has witnessed an outstanding performance. According to on-chain reports, Bitcoin has surged by 70% in the Q4 of 2020. And in November, the highest monthly close occurred as the price value went above $19,500 two times in a month.
At the start of the year, the correlation between the top digital asset and gold has reached a peak position but now the trend is happening the opposite as Bitcoin is surging high while gold is decreasing in value.
Prominent members in the crypto space claim that investors are now ditching gold for Bitcoin. But it is just speculation as gold is holding the market capitalization in trillions of dollars and it is very difficult to take down gold.
Last month, the investment giant JPMorgan Chase & Co rolled out a report claiming that the king cryptocurrency challenged gold as an option of a store of value because the institutional’ interest in the digital traded objects is growing at an alarming rate.
Prominent trader of Wall Street and renowned former hedge fund manager Raoul Pal recently revealed that he wanted to sell his BTC holdings in order to invest in the flagship cryptocurrency.
On the other hand, there are some counterpart arguments which say that Bitcoin is not going to take away the market share of the gold. He even claimed that whales only manipulate to take profit after dumping the coin.
“Bitcoin is not taking any market share away from #gold. That hype is just part of the pump so the whales can dump. The only markets where #Bitcoin is taking share are for lottery tickets, sports betting, casino gaming, penny-stocks, and some overpriced large-cap momentum stocks,” said Schiff, CEO of Europac.
But the on-chain metrics unveil that addresses containing a large number of Bitcoin are increasing which shows investors want to dedicate Bitcoin in their portfolios. Based on the data provided by blockchain analytics firm Santiment, 44 BTC addresses holding 1,000 coins and 820 addresses containing BTC from 10-1,000 coins came out in the past two weeks.