How The Gold Rally Has Been Mirroring Bitcoin’s Momentum Over Time

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Deutsche Bank analysts have highlighted parallels between gold and Bitcoin, as both assets continue to outperform this year. Other analysts have also made bullish predictions for BTC, noting that the flagship crypto appears to be mirroring the precious metal’s price action as investors jump on the ‘debasement trade.’

Deutsche Bank Draws Parallels Between Gold And Bitcoin

A Deutsche Bank report highlighted how the bank’s analysts argue that the same behavior that central banks exhibited towards gold during the 20th century has similar parallels to the way Bitcoin is now viewed. The analysts also noted that BTC is seeing record-breaking performance this year, just as gold, which topped $4,000 an ounce for the first time this month. 

Furthermore, Deutsche Bank analysts stated that Bitcoin is increasingly being discussed among policymakers as a reserve asset, alongside gold. Interestingly, the bank has predicted that central banks could accumulate BTC as a reserve asset alongside gold by 2030. The analysts noted how BTC has similar characteristics to gold, with it being viewed as a hedge against macro uncertainty. 

This has earned Bitcoin the tag ‘Digital gold,’ while investors continue to pile into BTC as an alternative to gold as part of the ‘debasement trade.’ This trade has become more heightened thanks to the ongoing U.S. government shutdown, which has further sparked macro uncertainty. Analyst Holger Zschaepitz noted that BTC is following its analogue counterpart, having recently hit a new high above $125,000. 

He added that this was a milestone in the ongoing debasement trade, as investors seek protection from currency devaluation. Meanwhile, crypto analyst Merlijn stated that BTC moves when gold leads and that in every previous macro breakout, Bitcoin has followed with parabolic force. In line with this, the analyst predicted that the flagship crypto could rally to $160,000 next if the pattern repeats. This aligns with JPMorgan’s analysis, which finds that BTC remains undervalued relative to gold and could rally to $165,000 by year-end. 

BTC Could Reach $644,000 Based on Gold Correlation

VanEck’s Head of Digital Assets Research, Matthew Sigel, stated that Bitcoin could reach half of gold’s market cap after the next halving in 2028. At the current gold price, he noted that this implies that the flagship crypto could rally to as high $644,000.  Gold currently has a market cap of $27 trillion, while BTC’s market cap stands at just $2.2 trillion. 

Sigel explained that roughly half of gold’s value stems from its use as a store of value rather than from industrial or jewelry demand. He added that surveys show younger consumers in emerging markets increasingly prefer Bitcoin as a store of value over gold. SkyBridge CEO Anthony Scaramucci echoed a similar sentiment, stating that as younger people age into senior positions, there will be a major shift in allocation from gold to BTC. 

At the time of writing, the Bitcoin price is trading at around $112,500, down in the last 24 hours, according to data from CoinMarketCap.

Featured image from Getty Images, chart from Tradingview.com

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