This Metric Points to Rotation From Gold to Bitcoin

The ratio surged 12% Wednesday as the pro-crypto Republican candidate Donald Trump won the U.S. presidential election.

A key metric is signaling a rotation of investor capital from gold to bitcoin, a trend that could favor the leading cryptocurrency in the coming months.

The bitcoin-to-gold ratio surged 12% Wednesday as the pro-crypto Republican candidate Donald Trump won the U.S. presidential election, notching BTC’s biggest single-day outperformance relative to gold since Feb. 28, according to charting platform TradingView.

The ratio, calculated by dividing bitcoin’s per-piece dollar price by gold’s per-ounce price, rose to 0.14 from 0.12 on Wednesday, continuing a recent uptrend. A higher ratio indicates bitcoin is outperforming gold.

The surge in the ratio confirmed a breakout from an eight-month-long downtrend, identified by a trendline connecting highs in March and June.

The breakout suggests a renewed outperformance of bitcoin relative to gold, fueled in part by investors shifting their funds from the yellow metal to BTC.

“Analyzing the BTC to gold ratio, we can see that the downtrend [indicative of gold’s outperformance since March] is starting to reverse. Globally, investors will increasingly focus on hedging against currency debasement and capitalizing on the Trump market play, both of which favor BTC,” Noelle Acheson, author of the Crypto Is Macro Now newsletter, told CoinDesk in an email.

BTC also stands to benefit from the expected regulatory clarity for the digital asset industry and increased institutional adoption under Trump’s presidency. There is speculation that the Trump administration could build a strategic bitcoin reserve.

Meanwhile, gold’s fate will likely be decided by the expectations of higher interest rates under the Trump presidency, which could dull its appeal.