Key Takeaways
- Bitcoin has rallied 145.5% YTD, outperforming gold’s 27.5% rise throughout 2024.
- Federal Reserve rate cuts have previously boosted gold markets, but recent cuts favored crypto markets.
- Bitcoin is currently trading at record highs above $100,000.
U.S. Federal Reserve Chair Jerome Powell has said that Bitcoin (BTC) is not a threat to the U.S. dollar and is instead in competition with gold, just in time for the premier crypto to break past $100,000 and soar to a market cap of $2.03 trillion.
Just Like Gold
Speaking at the DealBook Summit 2024 in Manhattan, Powell posited that Bitcoin is “just like gold, only it’s virtual.”
Powell has believed for years that Bitcoin is a speculative asset more akin to gold than a currency but has often cautioned on its volatility. At the conference, he notes:
“People are not using it as a form of payment, or as a store of value. It’s highly volatile. It’s not a competitor for the dollar, it’s really a competitor for gold.”
His comments come after Donald Trump’s historic U.S. Presidential Election victory sent waves of bullish sentiment across the crypto markets.
Pro-crypto politicians are now set to take important decision-making seats in the U.S. government.
Bitcoin Over Gold?
Jerome Powell’s recent remarks starkly contrast to those he made in 2021, when he cautioned that cryptocurrencies, in general, could pose a systemic threat to the U.S. dollar, citing privacy concerns.
Notably, at this time, investors preferred to shore up their assets in gold over Bitcoin, largely in anticipation of favorable monetary policy shifts.
Though those didn’t quite manifest in 2021, the bullish sentiment was enough to give gold markets a decent boost.
Fast-forward to 2024, and this narrative has shifted considerably. The November rate cut resulted in BTC hitting a new all-time high of $76,943 on Thursday, Nov. 7.
Institutional investors were also filling their boots as Bitcoin exchange-traded funds (ETFs) posted a record-breaking $1.38 billion in net inflows.
Gold prices barely budged, jumping just 1.8% from $2,659 per ounce to $2,707 on Nov. 7, before rather bearishly dropping to a 1-month low of $2,556 on Nov. 14.
Though prices have stabilized at $2,648, gold’s Q4 performance isn’t close to that of Bitcoin. This year, Bitcoin has outperformed gold by a wide margin.
Gold is up roughly 27.57% for the year, while Bitcoin is—so far—up approximately 145.5% year-to-date (YTD).
However, gold remains the world’s number one asset by market cap, commanding $17.92 trillion. Meanwhile, BTC now ranks seventh with $2.04 trillion.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
