YEREVAN (CoinChapter.com) – Bitcoin (BTC) price has bounced 26% year-to-date after starting the year below the $17,000 resistance. As a result, BTC/USD exchange broke the $20,000 ceiling for the first time since the FTX debacle and stood at $20,700 on Jan 19. The alpha crypto’s rapid price appreciation pace outshone Gold, a safe-haven asset that also registered impressive gains against the battered dollar.
Bitcoin vs Gold in 2023
As mentioned, the previous metal also had an impressive start to 2023. Spot Gold price per ounce hit a record high above $2,000 in Mar 2022, then dropped to $1,600 in Nov and rallied, fuelled by heightened demand ever since. After all the fluctuations, the XAU price stood at $1,908 per ounce on Jan 19, a 5% gain year-to-date.
Spot Gold price to gain more pace in 2023
Moreover, as CoinChapter reported in the previous Gold review, experts predict a stellar year for the safe-haven asset, given the looming recession. Much of the 2023 outlook for global markets hinges on the trajectory of monetary policy.
Central banks worldwide have eased off the aggressive interest rate hikes of the past year amid slowing economic growth. Thus, spot gold price could continue its rally against the dovish pivot, knocking on the $2,000 door once again. Ole Hansen, head of the commodity strategy at Saxo Bank and one of the aforementioned experts, predicted a rise for gold in 2023 to continue.
In general, we are looking for a price friendly 2023 supported by recession and stock market valuation risks. The de-dollarization seen by several central banks last year when a record amount of gold was bought looks set to continue, thereby providing a soft floor under the market.
5% price appreciation is significant for Gold. Furthermore, the asset currently trades only 8.5% below its highest value since the ’60s. Meanwhile, Bitcoin’s over 25% jump still puts the digital asset 70% lower than its all-time high of over $69,000. So can those two assets be comparable in any way?
Bitcoin’s “digital gold” narrative backfired
When digital assets first emerged a decade ago, the allusive Satoshi aimed to present the financial world with an alternative to the fiat system, eliminating the need for a potentially corrupt middleman. Thus, Bitcoin was pronounced ‘digital gold,’ an asset that could serve as a safe haven when the mainstream financial system was in too much turbulence.
However, the narrative changed in 2021, when the alpha crypto saw a substantial inflow from institutional investors. As a result, Bitcoin correlated with risk-on assets instead of Gold and became vulnerable to market downturns. The recent post-pandemic stock market crash was not an exception.
So what is in store for Bitcoin in 2023?
Bullish bias reversal, or dead-cat-bounce?
CoinChapter previously reported many opinions on the current BTC price appreciation. One of the outlooks sees the alpha crypto hitting new highs in 2023. Well-known Bitcoin bull and founder of Standpoint Research Ronnie Moas pinned the “fair value” at over $80,000. He based his prognosis on expectations that long-term investors will hold on to their tokens, causing the BTC price to surge.
According to Moas, short-term holders have already dumped their tokens in a bid to regain their losses. Going forward, there will not be as many sellers in the market.
As I have warned, diamond hands and whales bought whatever weak hands sold during the FTX panic … all losses from the Bitcoin drop following FTX have been reversed … another crisis overcome by BTC resilience … 2023 fair value and target $84,000.
Unlike gold, however, Bitcoin will be an unlikely winner if a recession strikes. Thus, traders should watch the charts carefully to gouge the profitable BTC market entry spot. The recent 25% uptrend was more stimulation than Bitcoin bulls have seen all year. But it could still turn out to be a dead-cat bounce, a temporary reversal amid the bearish market.
As demonstrated by the chart below, Bitcoin and the stock index S&P500 are still far from a confident reversal.
BTC might have outpaced gold by sheer gain percentage. However, the recession threats are hardly out of the picture. If the stock market dives, so will Bitcoin. However, the upcoming FOMC meeting on Feb 1 will shed more light on the Fed’s monetary policy for the year and, by extension, on all dependent markets, including gold and digital assets.
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