Bitcoin's value against gold hits a two-year low... 'digital gold' shakes [Decenter]

While international gold prices continue to surge to record highs, Bitcoin (BTC) has plummeted below $90,000, hitting its lowest value against gold in two years. Bitcoin, once likened to "digital gold" and considered an alternative investment, is now being evaluated as still demonstrating its risky asset characteristics amid recent geopolitical tensions.

According to TradingView on the 22nd, the value of Bitcoin against gold fell to $18.11448 that morning, its lowest level since November 2023. This is due to the widening price gap between the two assets, as the international gold price surpassed $4,800 per ounce for the first time on the 21st (local time), while Bitcoin broke below $90,000 on the same day. As of 3:20 PM on the same day, Bitcoin was trading at $89,976, still in the $80,000 range, according to CoinMarketCap.



Bitcoin spot exchange-traded funds (ETFs) have also seen a recent surge in net outflows, demonstrating a clear weakening of investor sentiment. According to CoinMarketCap, as of the 20th, Bitcoin ETFs experienced a net outflow of approximately $500 million, the largest outflow in the past two weeks.

This is interpreted as a result of the recent intensification of the conflict surrounding Greenland, which has led to a strengthened risk aversion. Bitcoin, which has been nicknamed "digital gold" due to its relative price correlation with gold, once surpassed Amazon as the world's fifth-largest asset last year, but has recently fallen back to eighth place. Some argue that Bitcoin's ability to function as an alternative asset is weakening as it fails to keep pace with the strength of traditional safe-haven assets like gold and silver.

Experts analyzed that Bitcoin, once considered an alternative investment, operating independently of the stock market, is gradually becoming linked to the stock market due to the influx of institutional investors. Linh Tran, senior market analyst at XS.com, commented, "Last year further highlighted Bitcoin's risk-on asset characteristics," adding, "It demonstrated a high correlation with the U.S. stock market over several periods."

However, some counter that the sharp decline in Bitcoin's value relative to gold is a pattern that has been repeated in the past and should instead be interpreted as a sign of a rebound. This suggests that when geopolitical uncertainty increases, funds initially flow to gold, followed by a lag inflow to Bitcoin as risk-asset signals recover.

Cointelegraph, a cryptocurrency media outlet, analyzed that “there is a precedent where Bitcoin showed signs of undervaluation against gold in late 2022 and then the price surged by about 150%,” and that “the current situation could actually be a sign of a future Bitcoin bull market turn.”

Reporter Kim Jeong-woo