Bitcoins’ entire market capital is eclipsed by the $2.5T gold dip

The value of gold has plummeted by trillions, which is more than Bitcoin.

On Wednesday, the gold market continued its massive decline, losing $2.5 trillion from its total market value. according The Kobeissi Letter is a financial analysis magazine.

The 8% decline has caused panic amongst investors, who were looking to gold as a hedge for inflation and volatility in the market after the 60% increase earlier this year.

Bitcoins (BTC) — often dubbed “digital gold” for its capped supply — is known for far sharper daily corrections with double-digit percent declines, gold’s latest crash underscores that even “safe-haven” Assets are not immune from steep price drops.

Why did gold crash?

In theory, the magnitude of this correction would be very rare. “once every 240,000 trading days,” Alexander Stahel – a Swiss investor of resources observed On Tuesday, I posted a message on X.

“Gold is giving us a lesson in statistics,” “The asset’s value has been reduced even more since 1971. This correction is 21 times,” he added.

Stahel cited the fear of missing something (FOMO) as the main reason for the decline. “gold frenzy” As investors seek to gain exposure to physical gold bars, tokenized gold and gold equity in order of increasing demand.

“FOMO caused the latest leg up. Now, profit taking and weak hands got shaken out,” Stahel added that there is a statistical chance that “calmer days are ahead.”

Crypto Fear & Greed Index at lowest levels since 2022

Some commentators have highlighted that the gold market correction is much greater than the Bitcoin market, which has a market capitalization of $2.2 trillion.

“In terms of market cap, this decline in gold today is equal to 55% of the value of every crypto currency in existence,” Peter Brandt is a well-known veteran trader wrote On Tuesday, X posted a message.

Bitcoin has been criticised for its volatility, one of the main arguments that it is not a valid store of value. slipped Coinbase data shows that daily losses are about 0.8%, but the intraday high was $114,000 at this time.

Bitcoin Spot ETFs are also available. saw Yesterday, crypto markets saw a $142 million surge in their momentum. “Extreme Fear,” with the Crypto Fear & Greed Index plummeting The highest levels since December 2022.

Related: Bitcoin-gold correlation increases as BTC follows gold’s path to store of value

Gold prices continued to fluctuate even after the macro-strategist at Deutsche Bank, Marion Laboure observed a set of parallels between gold and BitcoinThis could make cryptoassets a valuable store of wealth.

Analysts at Deutsche Bank also stated that, despite the parabolically breaking new highs in dollar termsIn early October, the gold price only exceeded its adjusted real all-time record high.