Bitcoin (BTC) Rallies 10% to $97,000 as Investors Shift Attention from Gold

Gold’s recent price tumble from its peak of $3,500 to $3,200 has sparked renewed interest in cryptocurrency markets. Bitcoin rallied approximately 10% to $97,000 as investors shift attention toward digital asset alternatives.

This market rotation benefits new crypto listings as investors search for innovative blockchain solutions.

Institutional money flow trends indicate a stronger preference for Bitcoin ETFs over gold investment products. Standard Chartered’s Geoff Kendrick suggests Bitcoin provides superior protection against strategic asset reallocation away from U.S. markets. This positive sentiment drives increased confidence in cryptocurrency investments and encourages strategic portfolio diversification decisions.

However, while gold has hit a three-week low and U.S. stocks posted modest declines, Bitcoin managed to rise around 10% to $97,000. This surge follows a report by the Bank for International Settlements (B.I.S.) that highlighted a strong preference for Bitcoin ETFs over gold investment products.

Standard Chartered's Geoff Kendrick further points out that Bitcoin offers better protection against strategic asset reallocation away from U.S. markets, a trend that has been observed in recent months.

“There has been more preference for Bitcoin ETFs over gold investment products, according to B.I.S. Furthermore, Standard Chartered's Geoff Kendrick suggests that Bitcoin offers better protection against strategic asset reallocation away from U.S. markets, a theme that has been unfolding in 2024.”

This analysis underscores the broader market trends influencing investment flows and the perceived strengths of different asset classes in the current economic climate. As investors navigate this dynamic landscape, they are making active choices that shape the performance and valuation of major assets like gold and Bitcoin.

BTC edges higher as crypto traders pour into meme coins

Bitcoin rose 1.58% in the past 24 hours to $96,347.8 by 01:48 ET (05:48 GMT). The world's largest cryptocurrency is now trading at a three-week high.

Bitcoin price today: BTC edges higher as crypto traders pour into meme coins

The cryptocurrency had fallen as low as $87,000 last month, but recovered sharply after a report by the Bank for International Settlements (B.I.S.) showed that institutional money flowed more strongly into Bitcoin ETFs than gold investment products in the first quarter.

B.I.S. researchers also found that there was a preference for instruments that could be easily traded out of U.S. markets, in a move that underscored the strategic asset allocation theme that has played out in 2024.

"In the first quarter of 2024, net inflows into Bitcoin ETFs outpaced those into gold investment products, according to B.I.S. data. This preference for instruments that could be easily traded out of U.S. markets continues a theme that unfolded earlier in the year," the report said.

The report also showed that hedge funds' derivatives positions in the second quarter indicated a strong bullish bias in Bitcoin, while positions in S&P 500 futures remained largely unchanged.

"Despite the S&P 500’s 15% return in the first half of 2024, hedge funds did not increase their equity exposure. Rather, they sold a net $1.9 billion of S&P 500 futures over the March-May period, largely canceling out the $2.4 billion of equity index futures they had bought in the fourth quarter of 2023."

Bitcoin is up more than 130% this year, while the S&P 500 has risen about 18%. Both assets hit all-time highs in May. At the same time, gold prices have tumbled about 12% this year.

According to Standard Chartered's Geoff Kendrick, Bitcoin offers better protection against strategic asset reallocation away from U.S. markets, compared to gold.

"While there has been talk of a preference for Bitcoin over gold, it's important to note that both assets are used for distinct purposes in portfolio construction," Kendrick said.

"Bitcoin is better-suited to provide protection against strategic asset reallocation away from U.S. markets, while gold is preferred for portfolio diversification at the asset class level."

This analysis suggests that Bitcoin is currently viewed as a more suitable hedge against macroeconomic uncertainty and market volatility, while gold is valued for its role in diversifying investment strategies across asset classes. As investors navigate these complexities, their actions are shaping the price trends and institutional demand patterns in the global financial markets.output: Join Our Telegram channel to stay up to date on breaking news coverage

Gold’s recent price tumble from its peak of $3,500 to $3,200 has sparked renewed interest in cryptocurrency markets.

This market rotation benefits new crypto listings as investors search for innovative blockchain solutions.