Bitcoin Price Rise in 2024 Not Enough To Beat Gold's Risk
According to Goldman Sachs, Bitcoin (BTC) price rise in 2024 did not offset price volatility concerns. Gold's greater risk-adjusted returns supported its âsafe havenâ status.
Bitcoin Loses to Gold Despite Gains
Over 73% gains were made by the largest digital asset by market valuation from $42,000 to $73,000 in March 2024. BTC is 40% higher than in January 2024 at $62,790.
Bitcoin has regularly outperformed major stock indexes, fixed-income instruments, gold, and crude oil in 2024.
Though BTC has seen tremendous increases, Goldman Sachs research shows that its volatility outweighs its price growth.
Goldman Sachs estimates BTC's YTD volatility at little under 2%. While gold gained 28% in absolute terms, its risk-adjusted return was 3%.
For beginners, the volatility ratio assesses an asset's return per unit of risk or volatility. A higher ratio means an asset performs better compared to risk, whereas a lower ratio means less efficient performance.
Bitcoin's volatility ratio was only better than Ethereum's native ETH token, S&P GSCI Energy Index, and Japan's TOPIX index among non-fixed income growth-sensitive assets.
Bitcoin's low volatility against gold makes it a "safe haven asset." Last week, BTC fell and gold rose after Iran attacked Israel.
Bitcoin Has A Long Way To Go
Bitcoin's rise to a trillion-dollar market valuation since the 2008 financial crisis is amazing.
BTC is interesting because to its 21 million supply, decentralized network design, and four-year halving. There's still a huge market cap disparity between Bitcoin and gold.
In the future years, crypto specialists believe Bitcoin will outshine the shiny metal. For instance, veteran expert Peter Brandt predicted that BTC may rise 400% compared to gold by 2025.
In August 2024, VanEck CEO Jan van Eck predicted that BTC adoption will push it to $350,000.
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