Bitcoin and Gold
Eric Balchunas, a leading ETF analyst, recently compared Bitcoin to “gold as a teenager.” The relationship between these two assets could help shed light on how Wall Street views crypto assets in the current climate.
The surge in demand for Bitcoin coincided with significant gold ETF sales, causing capital outflows of $7.7 billion over the same period, even as gold prices hit an all-time high of $2,200 an ounce.
Data shows that outflows from gold ETFs began in April 2022 and have continued steadily since then, with no sudden increase following the launch of US Bitcoin ETFs . About $46 billion was withdrawn from gold ETFs during this period.
This difference in ETF flows challenges the notion that the rise of Bitcoin has directly led to a decline in investor interest in gold, as the trend of outflows from gold ETFs begins before the Bitcoin ETF increased significantly in the United States.
How venture capital (VC) funds invest in cryptocurrencies
According to a report by Galaxy, in the first quarter of 2024, venture capitalists pumped $2.49 billion into cryptocurrency and blockchain-focused companies through 603 deals, marking the highest level of funding. increased 29% compared to the previous quarter and increased 68% in number of transactions.
Traditionally, venture capital investments in the cryptocurrency sector have closely mirrored Bitcoin price movements. However, over the past year, this correlation has broken down. Despite Bitcoin's significant price increase since January 2023, venture capital activity has not seen a corresponding significant increase.
Although Q1 2024 saw a significant increase in Bitcoin's value, investment levels are still below the highest levels seen when Bitcoin last surpassed $60,000.
This difference is likely due to a combination of industry-specific catalysts (like the Bitcoin ETF, advances in areas like resets and modularity, and Bitcoin Layer 2 solutions) and broader macroeconomic factors such as interest rates.
BTC is a risk-reducing asset
Bitcoin is often considered a high-risk investment due to its rapid growth and price fluctuations. However, according to Ark Invest, the Bitcoin network actually exhibits characteristics of risk-averse assets, promoting financial sovereignty, minimizing counterparty risk and enhancing transparency.
As the first independent, global, and rules-based digital currency system, Bitcoin's decentralization minimizes the systemic risks associated with traditional financial systems that rely on central parties. concentration time. It serves as a platform for converting and storing Bitcoin, a rare digital monetary asset.
Unlike traditional financial systems that rely on centralized institutions, Bitcoin operates as a single entity governed by a global peer-to-peer network, promoting the automatic enforcement of rules. active, open and transparent.
Bitcoin's volatility is strangely linked to its monetary policy, underscoring its credibility as an independent monetary system. Unlike modern central banks, Bitcoin does not prioritize price stability; instead, it controls Bitcoin's supply growth to prioritize free capital flow. This explains Bitcoin's price fluctuations, which are driven by demand relative to its supply.
Comparing Bitcoin's price to the Fed Funds Rate demonstrates its robustness across different economic and interest rate environments. Notably, the price of Bitcoin has increased significantly during both high and low interest rate regimes.
Over the past decade, Bitcoin has proven resilient during periods of risk, with its price consistently higher than during such events.
Source: https://tapchibitcoin.io/cac-nha-dau-tu-truyen-thong-co-coi-bitcoin-la-tai-san-rui-ro-khong.html
