The Bitcoin-to-gold ratio reached a historic all-time high (ATH) on December 16, as Bitcoin’s price surged above $106,000 for the first time. This metric, which measures the purchasing power of Bitcoin relative to gold, now stands at 40 ounces of gold per Bitcoin, with spot gold trading around $2,650 per ounce.
Bitcoin Outpaces Gold in New Milestone
Veteran trader Peter Brandt took to X to highlight the new ATH, stating that the ratio demonstrates Bitcoin’s growing dominance as a store of value. The Bitcoin-to-gold ratio is calculated by dividing Bitcoin's price by the spot gold price, indicating how many ounces of gold are required to purchase one Bitcoin.
Brandt confidently predicted that the ratio would continue to climb, suggesting a future milestone of 89 ounces of gold per Bitcoin as a long-term target.
Bitcoin's Growing Market Presence
Bitcoin’s price momentum aligns with its increasing market capitalization, which now stands at approximately $2.1 trillion, compared to gold's estimated $15 trillion market cap. Cathie Wood, CEO of ARK Invest, reiterated Bitcoin's potential to capture a significant share of gold's market dominance, further bolstered by comments from Federal Reserve Chair Jerome Powell, who recently referred to Bitcoin as a “digital version of gold.”
Mining Difficulty Reaches Historic Highs
The surge in Bitcoin's price comes amid a rise in mining difficulty, which hit a record 105 trillion on December 15, according to CoinWarz. This marks the final difficulty adjustment for 2024, with the next adjustment scheduled for January 1, 2025. Increased mining difficulty reflects heightened competition among miners, adding another layer of security to the Bitcoin network.
Outlook for Bitcoin
With Bitcoin’s price and adoption setting new records, the asset’s upward trajectory continues to outpace traditional stores of value like gold. As Brandt and other market observers suggest, Bitcoin’s potential for growth remains significant, particularly as institutional interest and market sentiment remain strong heading into 2025, according to Cointelegraph.
