Gold could start to overtake bitcoin as the cryptocurrency stalls at $70,000, says Wolfe Research

Published Thu, Mar 28 20241:05 PM EDTUpdated Thu, Mar 28 20241:16 PM EDT

Gold has a chance to charge ahead of bitcoin as the flagship cryptocurrency hovers around the $70,000 level, according to Wolfe Research. The yellow metal and its digital counterpart have been trading in tandem with each other for the past month, with both reaching new records even as the stock market trades near its highs. However, bitcoin has also been mirroring its own moves from 2021, when the cryptocurrency rocketed twice to all-time highs, just before a deep pullback. "Bitcoin has historically traded like more of a 'risk asset' and often is where excess liquidity has found a home for the retail investor (see 2021)," Wolfe's managing director Rob Ginsberg said in a note Wednesday. BTC.CM= @GC.1 1M mountain Bitcoin and gold have been rallying alongside each other this month, even with stocks reaching new highs "The similarities to that time frame are undeniable, but does the same fate await it? While we definitely aren't calling for a 50% correction like we saw then, it would not shock us to see bitcoin continue to stall out north of $70,000," he added. Gold may fare better, however. "The gold vs. bitcoin ratio is nearing support while oversold on a weekly basis," said Ginsberg. "If our feeling on bitcoin is correct, and it continues to consolidate in this $60,000–$73,000 region, it may provide a good opportunity for gold to start outperforming." Bitcoin hit an all-time high of $73,679 on March 14 before sliding as low as about $60,800 last week as traders digested the run. It has since returned to its highs and looks ready to reaccelerate, Ginsberg said, although selling pressure "has historically come on strong above $70,000." Bitcoin's "digital gold" narrative has been back in play for about a year after the cryptocurrency's correlation with stocks fell drastically in March 2023. The flagship crypto's rally this year was initially catalyzed by demand expected from the approval of spot bitcoin exchange-traded funds in the U.S., plus the price shock it is expected to experience soon after the late-April bitcoin halving .