Bitcoin takes over from gold - Is This the Permanent Shift?

When gold had its spell in the sun it was just about the only asset that was thriving, as US stocks took a big knock, and Bitcoin all but went into hibernation. However, it appears that the tables have turned. Stocks have made a v-shaped recovery, and Bitcoin is having something akin to a moon launch. Expect Bitcoin to make a new high against gold, and for this outperformance to continue longer term.

Most of Wall Street still does not know what Bitcoin is

One or two of the more traditional analysts have been talking up gold for some while now, saying that not only could it continue to outperform the US stock market, but that it would outperform Bitcoin into the bargain.

In fact, Bloomberg analyst Mike McGlone went on record several times in the Wolf of All Streets podcast, saying that he expected Bitcoin to go to $10,000. He made the observation that Bitcoin was still below the price of gold in 2021, and that it was now likely to decrease further against the shiny yellow metal.

Can $BTC take out the 41-ounce gold all-time high?

Source: TradingView

The weekly chart for Bitcoin/Gold reveals that $BTC is still below those 2021 highs. That said, this week’s surge has taken BTC/XAU beyond the tops of the 2021 candle bodies, and it might be expected that not only will those highs be overtaken, but also the 41-ounce all-time high. The measured move of the bull flag is to just below 38 ounces. The bulls will need to keep the price above the resistance band at the end of this week, thereby flipping it into support.

Bullish weekly gold chart

Source: TradingView

Looking at the purely gold chart on the weekly time frame, it must be noted that it is very positive indeed. The price has maintained above the ascending channel, which is incredibly bullish. 

The Stochastic RSI at the bottom of the chart is shaping for a cross up of the blue (fast) line above the orange (slow) line. This will add upside price momentum to gold as it gets above the 20.00 level.

$BTC price spike not slowing down yet

Source: TradingView

That said, the price chart that looks the best of all is arguably that of $BTC. The spike up over the last three days does not appear to be slowing down yet, and even though $BTC is quite overbought now, there could be enough in the tank via short squeezes and investor hype to take the price to $120,000, or even $130,000 before the next cooling down period.

Both Bitcoin and gold are great assets for your portfolio

Both Bitcoin and gold are great assets to hold in any portfolio, now and into the future. Yes, $BTC is likely to outperform gold going forward, given its limited supply and the fact that it is a tenth of the size of the market capitalization of gold. That said, they are both hard money assets, and both promise protection from the ravages of government-controlled fiat currencies. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.