Bitcoin has rocketed above $113,000 this morning, rising from $108,000 earlier In the session, traditional assets that were considered safe havens took a blow.
Spot gold lost more than 6 percent, falling to $4085.39/ounce. Meanwhile, spot silver dropped as much as 87%. This was its largest drop since the year 2021.
Bitcoin surged after Federal Reserve governor Christopher Waller announced a significant shift in U.S. cryptocurrency policy. announcing The interdisciplinary approach to a “skinny master account” program. The Fed is launching a program that will give digital assets and fintech companies limited direct access to their payment system.
Waller described cryptoassets, distributed ledgers and DeFi as being integral to mainstream finance. The Fed actively explores ways to integrate new financial technologies into legacy infrastructure.
Social media has been abuzz with questions about the sale of precious metals and whether or not investors are moving their capital. gold Silver into Bitcoin
Bitwise – A slight gold price shift can spark Bitcoin’s rally
Bitwise’s Crypto Market Compass Report today indicated that bitcoin was a ‘risky asset. positioned For a possible rebound in this quarter. There is the potential for a larger rally, if even just a fraction of gold capital was moved into cryptocurrency.
The firm emphasized that just a 3–4% shift from gold could have theoretically doubled bitcoin’s price, reflecting the stark difference in market capitalization between the two assets.
The analysis revealed several factors that were supportive. The market sentiment indicated that sellers were exhausted despite the recent performance.
A rise in stress among regional U.S. bankers had also increased systemic financial risk. Bitcoin as a counterparty-risk-free asset could have benefitted as investors sought alternatives to traditional financial institutions.
Signals that the Federal Reserve could pause, or reverse Quantitative Tightening in the U.S. as well as globally may have also accelerated the growth of liquidity. According to Bitwise, gold has historically responded strongly to monetary conditions that are more lenient. Bitcoin is expected to do the same.
Bitwise noted further that Bitcoin’s relative performance to gold tends to follow shifts in the risk appetite. In periods of renewed risk appetite, Bitcoin’s performance relative to gold tends to track shifts in risk appetite. “risk-on” Bitcoin is historically more profitable than gold. Therefore, even a small rotation in capital can produce a large effect.
Bitwise has rated the market as favorable to Bitcoin. A small shift from gold to Bitcoin can spark an important rally.
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Source: bitcoinmagazine.com
