HomeNewsCryptocurrencyBitcoin to Gold Ratio Hits Highest Level Since January 2018

Bitcoin to Gold Ratio Hits Highest Level Since January 2018

Over the years, people have deemed Bitcoin to be “digital gold”. While that is often done in a good spirit, both assets continue to drift apart. Especially where the Bitcoin to gold ratio is concerned, the momentum favors BTC. 

The Bitcoin to Gold Ratio Rises Further

On paper, one can see why Bitcoin and gold can be mentioned in the same breath. They are both valuable, scarce, and have tremendous speculative value. Moreover, neither of these assets is controlled by the government or a central bank. That makes them intriguing investment vehicles, despite noting very different market performances. 

Whereas the potential supply of gold remains undetermined, Bitcoin’s supply is fixed. It is, by definition, far more scarce than gold will ever be. It may not have industrial use cases, but there are other strengths to explore. In terms of sheer market performance, Bitcoin outshines gold in every single way.

Fintoism Bitcoin to Gold 10Y
Source: XE.com

Judging by the chart above, the momentum is clearly in Bitcoin’s corner. A Bitcoin to gold ratio depicts the correlation between both assets. As this ratio shifts in favor of the cryptocurrency, the tone is clearly set. The chart shows an interesting trend in favor of the world’s leading cryptocurrency.

As of today, one can buy 10.62 ounces of gold with 1 Bitcoin. That is the logical outcome of the Bitcoin to gold ratio evolving in this regard. The momentum strongly favors Bitcoin since March of 2020. Even then, one could still buy 3.41 ounces of bullion per BTC.

Both are Solid Investments

Looking at the Bitcoin to gold ratio from a numbers perspective, there is no further debate. However, both Bitcoin and bullion remain solid investments. It all comes down to what one aims to achieve by diversifying a portfolio with these assets. As a store-of-value, gold may be slightly better. Bitcoin offers more potential to increase in value, though.

It will never hurt to have one or both assets in one’s portfolio. Even with a skewed Bitcoin to gold ratio like this, the core aspects of these vehicles remain unchanged. They can both get the job done as an investment vehicle. 

JP Buntinx
JP Buntinx
JP Buntinx is passionate about cryptocurrencies, fintech, blockchain, and finance. He currently resides in Belgium.


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