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In summary
- Bitcoin hit a record 37.3 ratio to gold, surpassing the 2021 high of 36.7.
- Global Bitcoin ETFs accumulated $119 billion versus $290 billion for gold ETFs.
- The planned shortage of Bitcoin contrasted with the continued Mining production of gold.
Bitcoin’s rally to new highs this week has pushed its relationship with gold to record levels, as institutions continue to invest in the digital asset towards the end of the year.
The ratio, which measures how many ounces of gold one Bitcoin can buy, reached record levels on Monday, rising to 37.3, meaning one Bitcoin can now buy approximately 37 ounces of gold—a new all-time high.
The reading is now about half a point higher compared to that seen during the peak of the previous Cryptocurrency bull market in November 2021, which was 36.7.
“Reaching a new high signals the continued adoption and maturation of Bitcoin as an asset class,” Sidney Powell, CEO and co-founder of institutional capital market Maple Finance, told Decrypt. “We expect to see the ratio balance based on momentum from ETF inflows, which historically increase over time, and Bitcoin increasingly seen as a fundamental part of balanced portfolios.”
The ratio calculated by dividing the price of Bitcoin by the spot price of gold per ounce, typically serves as an indicator to compare the relative strength and investor preference between the two assets. The relationship reinforces Bitcoin’s status as digital gold, positioning it as an “increasingly favored store of value over traditional gold,” Singapore-based digital asset trading firm QCP Capital wrote in a note on Monday.
Still, traders continue to turn to gold during times of uncertainty over Bitcoin, which has become more correlated with traditional markets, thanks in part to the approval of Bitcoin exchange-traded funds (ETFs) in the United States in January. .
Assets under management of global Bitcoin ETFs have reached $119 billion, according to data from Coinglass. This is less than half of the $290 billion in gold-backed ETFs as of November 2024, according to data from the World Gold Council.
Bitcoin’s code limits its maximum supply to 21 million tokens and includes halving events that periodically reduce the new supply by 50%, ensuring that the last Bitcoin will not be mined until approximately 2140.
Its scheduled scarcity contrasts with the continued mining production of gold, although both assets are frequently compared as stores of value due to their limited supply characteristics.
In any case, while gold maintains lower volatility—around 20% annually—and benefits from its 3,500-year history as a traded asset, Bitcoin offers greater return potential despite more significant price swings, with a volatility close to 50%.
Edited by Sebastian Sinclair
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