Gold continues to prove itself as a strong store of value, Bitcoin is struggling to gather momentum.
By Mayowa Adebajo
Edited by Marco T. Lanz
Updated
3 mins read
The growing fears of a US-instigated trade war may have opened up the opportunity for gold (XAU) to gain over Bitcoin BTC $82 988 24h volatility: 3.0% Market cap: $1.65 T Vol. 24h: $35.02 B . This situation has brought the Bitcoin-gold ratio to its lowest level in over 12 weeks.
While gold continues to prove itself as a strong store of value, Bitcoin is struggling to gather momentum. According to data from TradingView, the ratio between BTC price in US dollars and gold’s per-ounce price has dropped to 34. This represents its lowest level since November 14, 2024, and also marks a 15.4% drop from December, when it peaked at over 40.
One might wonder why gold is shining as of this moment. However, its rise may be linked to several factors, all interconnected. First, there is a very large demand for the asset, whose year-to-date price has surged roughly 10% to an all-time high of $2,877 per ounce.
Furthermore, the ongoing trade tensions between the US and China have also left investors with little or no other option. Many are now choosing gold for the security of their funds, especially during these uncertain times.
Similarly, demand for gold is currently on the rise in China due to the Spring Festival holidays. All these have now piled more pressure on gold’s supply, pushing its value upwards.
Speaking about deliveries, tariffs on metal products have been rising, and this has in some way been affecting the gold market. Futures prices for gold on the Comex exchange, for instance, have been trading much higher than spot prices. This is the reason behind the increased shipments of physical gold to the US in recent months.
Investment banking giant JPMorgan is not left out of this trend. The bank also recently revealed plans to deliver $4 billion worth of gold bullion to New York this February.
Unlike gold, Bitcoin’s price has remained relatively weak. That is, despite the US-listed spot Bitcoin exchange-traded funds (ETFs) seeing a substantial inflow of capital in recent times.
To put the above statement into perspective, these ETFs have attracted over $4 billion in investments in just about three weeks. However, experts believe that there is a reason why these inflows have not had any serious impact on the value of Bitcoin. To them, those capitals are likely to have come mostly from traders engaging in arbitrage trading rather than genuine demand for the asset.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.
