Institutional investors’ continued infusion of capital. Bitcoin is pushing its ratio relative to gold to all-time highs as we approach the end of the year. The latest breakout in Bitcoin’s price has further increased this ratio. On Monday, the ratio reached an all-time high of 37.3, representing the amount of gold one Bitcoin can buy. The current price of one Bitcoin is about 37 ounces of gold, which is a record high.
“Reaching a new peak indicates ongoing acceptance and development. Bitcoin as an asset class,” declared Sidney Powell, CEO and co-founder of Maple Finance, in an interview with Decrypt. With ETF inflows rising and bitcoin being seen as an essential part of diversified portfolios, we expect the ratio to catch up.
Bitcoin’s Top Digital Gold
As a result of institutional adoption this year and the allure of its scarcity model, Bitcoin has become increasingly dominant as “digital gold,” as shown by the historical print of the reading, which is produced by dividing the price of Bitcoin Hits New by the spot price of gold per ounce.
Typically, investors will use it to evaluate the two assets side by side and pick the one they like most. Compared to its all-time high in November 2021, it is now around half a point higher at 36.7. According to a Singaporean digital asset trading business QCP Capital report, the ratio further establishes Bitcoin as digital gold, propelling it to an “increasingly favoured store of value over traditional gold.”
Bitcoin vs. Gold Scarcity
Gold remains the go-to for traders during crypto market volatility, even if Bitcoin and traditional markets have become more intertwined, partly due to the January licensing of U.S. Bitcoin exchange-traded funds. The market capitalization of Bitcoin exchange-traded funds (ETFs) has surpassed $119 billion.
According to the World Gold Council. This sum is significantly lower than the $290 billion owned by gold-backed ETFs as of November 2024. A strict cap of 21,000,000 tokens is defined. The Bitcoin Reaches Record code, and the supply is periodically reduced by 50% through halving events. As a result, the final Bitcoin won’t be created until around 2140.
This commodity is sometimes compared to gold because of its restricted availability, yet the intentional scarcity of this asset stands in sharp contrast to the continuous mining output of gold. Gold has lower volatility (around 20% yearly) and benefits from its 3,500-year history as a traded asset, whereas Bitcoin offers tremendous return potential despite more dramatic price fluctuations (near 50%).
Summary
The unprecedented institutional investment in Bitcoin has caused. The price ratio hit all-time highs, with one Bitcoin equivalent to around 37 ounces of gold—rising interest in Bitcoin as “digital gold,” supported by its scarcity. The influx of capital into exchange-traded funds is driving this surge.
Even though Bitcoin’s volatility presents greater return possibilities amid market instability. The assets of Bitcoin ETFs ($119 billion) are still far lower than those of gold-backed ETFs ($290 billion). While Bitcoin Hits New has a fixed supply and gold is mined, the former has achieved a record high.
