Gold or Bitcoin?


We are looking for the answer to the question of “Gold or Bitcoin”, which is on the agenda of individual investors, by examining both markets and looking at institutional investor behavior.

After the Bitcoin price entered the bull market, gold holders started buying Bitcoin by exchanging their gold. For this reason, gold sales reached a record level.

Commenting on the ongoing rally in the Bitcoin (BTC) price, many analysts state that the power of institutional investors should be approached with utmost importance. After the high rate of appreciation in the gold market, gold started to see a significant amount of sales.

Jan Nieuwenhuijs, finance researcher, shared on 24 November in tweetstated that the biggest weekly sale in gold history occurred.

They Turned From The Gold Market To The Crypto Market

This period of high sales in the gold market started to draw attention. Then, the increasing purchase volumes in the Bitcoin market were interpreted as institutional investors turning to the crypto market. Guggenheim Partners, which manages assets worth about $ 275 billion, is an example of this.

Well, this trend is Bitcoin What is the meaning for?

The entry of this capital into the Bitcoin market, which will be kept in the medium / long term, and which turns from gold to Bitcoin, can cause two main trends:

First of all, Bitcoin is expected to have a longer-term uptrend due to the bull market it has been in since September 2020. Investors turning to Bitcoin (BTC) are accumulating Bitcoin with a long-term strategy as they expect the continuation of the rising price trend with purchases.

Raoul Pal, CEO of Real Vision Group, made some statements about this situation:

“I placed an order tomorrow to sell all my gold and buy 80 to 20 BTC and ETH. Except for some bond buy orders and a bit of dollars, I have no other investments. 98% of my net asset in terms of liquidity consists of them. “

The second expected trend is that in the opinion of most fund managers, Bitcoin will have a more dominant influence on the cryptocurrency market. Currently available, Bitcoin’s market cap accounts for approximately 64% of the global cryptocurrency market cap.

They Turned From The Gold Market To The Crypto Market

Bitcoin market dominance index. Source: Coinmarketcap

Kyle Davies, co-founder of Three Arrows Capital, one of the largest funds in the cryptocurrency industry, explained:

“Nobody buys gold. BTC> altcoins. Huge amount of dollars or gold this year To BTC net asset flow was seen. This is not the job of individual investors. These men aren’t being carried away by waves. ”

Bitcoin short-term trend remains uncertain

Bitcoin value has seen a strong upward trend over the past three months. Major corrections were also seen in Bitcoin value, although not at the same rate as this uptrend.

In previous bull markets, it is seen as a usual scenario for Bitcoin to retreat by about 30%. The recent drop is not considered one of the biggest setbacks, as analysts say for the short term Bitcoin could see a more drastic drop.

They Turned From The Gold Market To The Crypto Market

Bitcoin exit averages from exchanges. Source: CryptoQuant

CryptoQuant CEO Ki Young Ju explained that whales in the market are holding more Bitcoin than in the past few months. This indicates that the whales in the market have an expectation that they will sell more Bitcoin in the coming times.

In Bitcoin’s uptrend, it was observed that purchases continued after these sales. In this case, despite the price corrections, new peak prices continue to occur.

In this case, it seems that the question of “Gold or Bitcoin” will remain on the agenda of investors for a while.

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