Deutsche Bank analysts have highlighted parallels between gold and Bitcoin as both assets continue to outperform this year. Other analysts have also made bullish predictions for BTC, noting that the flagship crypto appears to be mirroring the precious metal’s price action as investors jump into the market. ‘degrading trade.’
Deutsche Bank draws parallels between gold and Bitcoin
A Deutsche Bank report highlighted how the bank’s analysts argue that the same behavior that central banks showed towards gold in the 20th century has similar parallels to the way Bitcoin is viewed now. The analysts also noted that BTC is seeing record-breaking performance this year, as did gold, which crossed the $4,000 per ounce mark for the first time this month.
Furthermore, Deutsche Bank analysts stated that Bitcoin is increasingly discussed among policymakers as a reserve asset, alongside gold. Interestingly enough, the bank has predicted that central banks could accumulate BTC as a reserve alongside gold by 2030. The analysts noted that BTC has similar characteristics to gold as it is seen as a hedge against macro uncertainty.
This has earned Bitcoin the tag ‘Digital gold,” as investors continue to flock to BTC as an alternative to gold as part of the “debasement trade.” This trade has intensified thanks to the ongoing US government shutdown, which has further fueled macro uncertainty. Analyst Holger Zschaepitz noted that BTC is tracking its analog counterpart and recently reached a new high above $125,000.
He added that this was a milestone in the ongoing downgrade trade as investors seek protection from currency devaluation. In the meantime, crypto analyst Merlijn stated that BTC moves when gold leads and that Bitcoin has followed with parabolic force in every previous macro breakout. In line with this, the analyst predicted that the flagship crypto could rise next to $160,000 if the pattern repeats. This corresponds to JPMorgan’s analysisshowing that BTC remains undervalued against gold and could rise to $165,000 by the end of the year.
BTC could reach $644,000 based on gold correlation
VanEck’s head of Digital Assets Research, Matthew Sigel, stated that Bitcoin could reach half the market cap of gold after the next halving in 2028. At the current gold price, he noted that this implies the flagship crypto could soar to a high $644,000. Gold currently has a market capitalization of $27 trillion The market capitalization of BTC amounts to only $2.2 trillion.
Sigel explained that roughly half of gold’s value comes from its use as a store of value and not from demand for industrial products or jewelry. He added that studies show that younger consumers in emerging markets increasingly prefer Bitcoin as a store of value over gold. SkyBridge CEO Anthony Scaramucci echoed this a similar sentiment, stating that as younger people age into higher positions, there will be a major shift allocation of gold to BTC.
At the time of writing, the Bitcoin price is trading around $112,500, down in the past 24 hours. facts from CoinMarketCap.
Featured image from Getty Images, chart from Tradingview.com
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