Bitcoin's breakout hit new highs this week as institutions continued to pile into their digital assets at the end of the year, pushing the ratio against gold to record lows.
The ratio, which measures how many ounces of gold one bitcoin can buy, hit an all-time high on Monday, rising to 37.3, meaning one bitcoin can now buy roughly 37 ounces of gold — a new all-time high.
The reading is now up half a point from the peak of the crypto's previous bull run in November 2021 at 36.7.
“Hitting a new high shows the continued adoption and maturity of Bitcoin as an asset class,” Sidney Powell, CEO and founder of institutional capital marketplace Maple Finance, told Decrypt. “We expect to see the ratio increase based on ETF tailwinds, which is a growing trend and Bitcoin is increasingly seen as a core component of balanced portfolios.”
It is calculated by dividing the price of Bitcoin by the spot price of gold per ounce, it is commonly used as an indicator to compare the relative strength and investor preference between two assets.
The ratio reinforces Bitcoin's status as digital gold, positioning it as an “increasing store of value over traditional gold,” Singapore-based digital asset trading firm QCP Capital wrote in a note on Monday.
Still, traders continue to opt for gold amid uncertainty over bitcoin, which is tied to traditional markets, in part because of the acceptance of bitcoin-exchange-traded funds in the U.S. in January.
Global Bitcoin ETF assets under management reached $119 billion, according to data from Coinglass It shows. This is the year That's less than half of the $290 billion in gold-backed ETFs in November 2024, it said. Data From the World Gold Council.
Bitcoin's code limits its maximum supply to 21 million tokens and periodically halves events that reduce new supply by 50%, ensuring that the last Bitcoin won't be produced until 2140.
The program's scarcity contrasts with gold's uninterrupted mining output, although both assets are frequently contested as stores of value due to their limited supply characteristics.
In any case, while gold has low volatility of around 20% per year and its 3,500-year history as a trading asset, Bitcoin offers higher return potential despite more significant price volatility, with volatility approaching 50%.
Edited by Sebastian Sinclair
Daily Debrief Newspaper
Start every day with top news stories, plus original features, podcasts, videos and more.
