Bitcoin to Gold Ratio Reaches All-time High
The Bitcoin to gold ratio, a key metric comparing Bitcoin's purchasing power relative to gold, reached a new all-time high (ATH) as Bitcoin’s price hit record levels.
Veteran futures and forex trader Peter Brandt shared on X (formerly Twitter) on Dec. 16 that the Bitcoin to gold ratio had reached a new ATH.
The Bitcoin to gold ratio is calculated by dividing Bitcoin’s price by the cost of spot gold, showing how many ounces of gold are needed to purchase one Bitcoin.
On Dec. 16, the ratio reached its highest point yet at 40 gold ounces per Bitcoin, as Bitcoin’s price surpassed $106,000 for the first time, with spot gold (XAU) trading around $2,650.
Brandt, highlighting this new record, predicted that the metric would continue to rise:
“Next stop will be 89 to 1 — it will require 89 ounces of gold [to buy 1 BTC],” he stated.
Brandt’s projection aligns with a popular narrative in the cryptocurrency community, emphasizing Bitcoin’s potential to challenge gold’s $15 trillion market.
At the time of writing, Bitcoin was priced at $104,690, giving it a market capitalization of approximately $2.1 trillion.
The gap between Bitcoin’s and gold’s market caps leaves significant room for growth, according to ARK Invest founder and Bitcoin advocate Cathie Wood, who commented on this potential earlier in December.
Wood’s remarks followed comments by U.S. Federal Reserve Chair Jerome Powell, who referred to Bitcoin as a "digital version of gold" after BTC crossed the $100,000 mark on Dec. 5.
This new ATH for the Bitcoin to gold ratio coincides with increasing challenges in mining new Bitcoin.
On Dec. 15, Bitcoin’s mining difficulty, which measures the complexity of solving the cryptographic puzzles required to validate transactions and secure the blockchain, reached a new high of over 105 trillion, according to data from CoinWarz.
Mining difficulty is adjusted every 2,016 blocks (approximately every 14 days), with the next adjustment scheduled for Jan. 1, 2025.
Sources:
https://bitmarkets.com/en/education/cryptopedia/BTC
https://x.com/PeterLBrandt/status/1868488885015367720
https://www.tradingview.com/symbols/XAUUSD/
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