The Strengthening Relationship Between Bitcoin and Gold Overtaking Gold in 2023
According to Fidelity's research, the relationship between Bitcoin and gold has strengthened significantly and reached a remarkable point. This shows that Bitcoin has eclipsed the performance of real gold, justifying its once description as 'digital gold'.
Performance of Bitcoin:
According to Fidelity's report, Bitcoin's price has generally increased in an environment where rises in global interest rates reduce demand for risky assets. Bitcoin, which was previously thought to have an inverse relationship with interest rates, completely changed this dynamic in 2023, maintaining its stability and even rising.
Gold and Bitcoin Relationship:
In a year when gold increased by 14.6%, especially against the US dollar, Bitcoin's appreciation rate was 156%. According to Fidelity's analysis, the main reasons for the increasing correlation between Bitcoin and gold include the increase in the US fiscal deficit and potential changes in interest rates.
Bitcoin's Supply Environment:
Fidelity's report also emphasizes that Bitcoin's supply environment is increasingly tightening. The number of long-term Bitcoin holders reaching an all-time high is contributing to the rise in Bitcoin's price, bringing with it strong holding periods of the bear market.
In light of these analyses, we can conclude that the relationships of Bitcoin and gold with traditional financial markets have evolved and these two assets are now starting to act more interconnected. Fidelity's report can be considered as the beginning of a new era for both Bitcoin and gold. Investors should be wary of possible changes in the U.S. fiscal deficit and interest rates and consider how these developments may affect their portfolio strategies.
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