As Chinese individual investors massively sold gold during the Labor Day holiday, Bitcoin prices surged. Analysts suggest that Bitcoin, evaluated as 'digital gold', is gradually establishing itself as a 'value storage medium'.
According to the financial information site Investing.com on the 5th, gold futures prices on the afternoon of the 2nd were recorded at $3,267.19 per ounce (approximately 4.55 million won). This is a 7% drop from the all-time high of $3,500 per ounce recorded on the 22nd of last month.
The decline in gold prices is attributed to selling pressure from Chinese individual investors. According to the DeFi media The Defiant, Chinese investors released about 1 million ounces of gold in the market at the end of last month through Shanghai Futures Exchange and Shanghai Gold Exchange. This is the largest single-point volume on record. During this period, Bitcoin rose from 124 million won to 140 million won. While gold dropped by 7%, Bitcoin increased by 13%.
Experts assessed that this massive gold sell-off by Chinese investors drove Bitcoin investment demand. The diagnosis is that they realized profits at the peak and moved money to Bitcoin as an alternative investment. This analysis is based on Bitcoin's similar value to gold.
Bitcoin is similar to gold in several aspects such as △perpetuity △scarcity △mining difficulty. This is why Bitcoin is evaluated as digital gold as a value storage medium due to its fixed supply (21 million). US Federal Reserve Chairman Jerome Powell also mentioned at the 'Deal Book Summit' in New York last December that "Bitcoin is a competitor to gold, not to the dollar".
The Defiant stated, "This gold sell-off is a signal of changing investment sentiment in China" and "It demonstrates Bitcoin emerging as a new preferred asset".
