Bitcoin strengthens against gold as 1 BTC now buys over 28 ounces

BTC takes a more robust position against gold and can buy 28 ounces. The switch happened as spot gold dipped under $4,000, while BTC recovered to over $115,000. 

One BTC now buys a little over 28 ounces of gold, after the precious metal dipped under $4,000. Spot gold traded at $3,987.28, extending its slide from the past week. While both BTC and gold are seen as part of the ‘debasement trade’, the assets also saw speculative trading near their recent peaks. 

As Cryptopolitan reported earlier, gold’s rally was seen as a hedge against other volatile assets, but the price records held significant risks. Gold was down 9% from its recent peak, but lost over 12% against BTC in the past week. 

During the latest market downturn, BTC was considered undervalued against gold. Now, the two assets may rebalance their market capitalization. The entire market cap of gold is also seen as a potential target for BTC, especially if more widely adopted as a reserve asset.

Following a period of turbulence for both gold and BTC, the assets returned to a ratio not seen since November 10, 2024. BTC is still down on a monthly basis, after buying up to 32 ounces of gold as of October 5. However, the recent trend reversal shows gold is no longer the top focus, and BTC may respond with a bigger rally. 

Gold expects a bigger correction in the coming week

As the hype around gold subsides, analysts expect a continued correction in the coming weeks. 

‘I think a lot of people in the industry would actually welcome a deeper correction than we have at the moment,’ said John Reade, market strategist at the World Gold Council, cited by the Financial Times.

Gold was at one point expected to expand to $5,000, but the rally’s irrationality meant the climb was not sustainable. 

Tokenized gold also retreated, with most tokens falling to the $3,800 range. The one exception was the UGOLD token, which continued to trade above $4,300, though with low volumes and small market depth.

BTC remains the year’s biggest winner

BTC is now up 69% for the year to date, with a small net gain in October. There is no clear consensus on whether BTC is a safe-haven asset, an inflation offset, or a risky asset. 

The leading digital coin was at one point briefly surpassed by silver. Now, BTC is once again ahead of precious metals. 

Gold is up a net 45.9% for the year to date, while silver gained a net 37.5%. The short-term demand for physical precious metals was also not enough to sustain the expansion of metals. The recent correction in gold and the drop in silver to $ 46.40 are seen as potential factors redirecting liquidity to other assets, including BTC and cryptocurrencies.

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