Gold’s lower volatility than Bitcoin gives it an edge when the markets wander in uncertainty, Maruf Yusupov, co-founder of the gold-backed stablecoin Deenar, told crypto.news.
“The reasons for this Bitcoin trend are not far-fetched and are hinged on the uncertainty surrounding the potential Interest Rate cut from the US Federal Reserve.”
Yusupov added.
The fall of the Bitcoin (BTC) price below the $60,000 mark on Sept. 15 triggered fears of another downfall among investors. Meanwhile, gold’s steady upward momentum made it a better investment alternative since “investors are still cautious of general uncertainty,” Yusupov says.
Gold recorded a 0.04% over the past day and is trading at $2,584 at the reporting time, per data from Trading Economics. The asset even reached an all-time high of $2,589 yesterday while Bitcoin was struggling around the $58,000 zone — down by 22% from its ATH of $73,750.
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“The limited volatility of Gold has made it an attractive alternative in the push to hedge against the underlying uncertainty.”
Yusupov said.
Per a crypto.news report, spot BTC exchange-traded funds surpassed the $61 billion mark in terms of total assets under management, reaching 25% of the gold ETF AUM’s $257 billion in six months.
Notably, the recent market-wide turmoil and mixed sentiment toward the U.S. Fed rate cut brought increased outflows, with BlackRock surprisingly joining the outflow trend.
“Though it is too soon to claim that traditional investors are moving toward gold, the market data generally favors this theory.”
Yusupov argues.
Bitcoin recorded a 0.24% dip in the past 24 hours and is trading at $58,500 at the time of writing. The cryptocurrency market cap declined by 1.2% and is currently sitting at $2.13 trillion, according to CoinGecko.
BTC price – Sept. 17 | Source: crypto.news
The downward momentum comes amid mixed reactions toward the expectations of a 50 basis point rate cut by the U.S. Fed.
Read more: Sen. Warren advises 75bps Fed cut on recession fears