Which is better in case of recession?

When it comes to bearishness, comparisons between gold and Bitcoin are bound to arise, especially in light of potential Bitcoin ETF approvals. While most of the mainstream media advocates a soft landing, some institutions and experts insist that the picture is not so pretty.

Investment manager Van Eyck predicts the U.S. economy will enter a recession in the first quarter, before many analysts believe the Federal Reserve will start cutting rates. A broad slowdown in output and employment, a slowdown in retail sales and an inverted yield curve are all signs of a sharp slowdown in growth.

Macro conditions will improve the price of gold

According to Joseph Cavattoni of the World Gold Council, gold thrives on market risk and uncertainty. More and more central banks are moving out of the US dollar and into gold, which will soon increase demand. Geopolitics is also playing an increasing role.

“Investors will pay more attention to gold because they don't want to be blind in 2024,” he said.

While gold's technicals have been slowing recently, Cavattoni expects the asset's performance to be further shaped by macroeconomics in the coming months. The asset touched a high of $2,150 an ounce last week, but sellers pushed it back.

If it stabilizes, it may breach the $1,990 and $2,010 levels, but if further selling occurs, the price may drop below the 200-day simple moving average of $1,950 and move towards $1,930.

Bitcoin May Defy Recession Effectiveness

VanEck predicts that the approval of an exchange-traded fund will support Bitcoin's value into 2024. Absent volatility, the asset is unlikely to drop below $30,000 in Q1 and can form an important part of investment portfolios.

Read more: How to prepare for a Bitcoin ETF: A step-by-step approach

The financial firm predicts it will steal $2.4 billion in quarterly revenue and market share from gold. ETFs could see $40.4 billion in inflows in their first two years of listing.

So, in short, Bitcoin ETF approvals can counter Fed money printing in the event of a recession. If the U.S. economy experiences a hard landing and central banks choose to hold assets in excess of the U.S. dollar, gold could benefit from a relative decline, Cavattoni said.

Today is the first day of the US Federal Reserve meeting that market participants eagerly await. The Fed will decide how to raise interest rates to bring inflation down to 2 percent.

Read more: How to buy Bitcoin safely

Any thoughts on gold and bitcoin's fall in the bearish war, the role of ETFs in driving up the price of bitcoin, or anything else? Please write to us or join the conversation on our Telegram channel. You can also find us on TikTok, Facebook or X (Twitter).