Trading around 68,000 USD per unit, Bitcoin is still below the record while gold prices and the S&P 500 index continuously reach new milestones.
Bitcoin (BTC)’s 8% rally this week outperformed gold and the S&P 500. But the digital currency is still trading below all-time highs, while the precious metal and benchmark U.S. stock index are both climb to new record.
In the face of Middle East tensions, gold has hit $2,720 an ounce, up 32% from the beginning of the year and is on track for its best annual performance since 2010 (at which time the channel increased 38%). And the S&P 500 has accumulated about 23% in nearly 10 months. Meanwhile, Bitcoin did not set a new record after about 7 months of price decline and then moving sideways (currently still higher than 50% since the beginning of the year).
Why is there no new record for Bitcoin? According to the analysis team CoinDeskthe main reason why digital currencies are slow in the race among current asset channels is because of the consequences of the record high above 73,700 USD in March. This group evaluates the previous record as “too far, too fast”. . At that time, the price of the world’s largest cryptocurrency had increased 5 times compared to 14 months ago. If only counted in the first 10 weeks of 2024, BTC doubled in price.
Going into more detail, there has been a lot of strong selling pressure recently, such as the German government releasing a large confiscated Bitcoin warehouse and the Mt Gox trust exchange starting to return token debt to their owners. .
There is also the fact that BTC trades 24/7, and is therefore subject to more pressure and volatility than other assets. This can lead to more liquidations in the cryptocurrency market every time there is instability, pushing prices down even more.
However, looking ahead, Bitcoin still has many positive signs. According to data from the Glassnode exchange, from small investors – those holding less than one BTC – to even “whales” (those owning 1,000-10,000 tokens) have accumulated assets over the past few months. This shows that demand is not exploding but still maintaining steadily in the market.
With further interest rate cuts from Western central banks on the horizon, dominant expectations of pro-crypto presidential candidate Donald Trump and a massive increase in inflows into BTC investment funds , experts CoinDesk believes that there is still a scenario for Bitcoin to set a new record.
In addition, the market is recognizing a positive but easily overlooked catalyst, the new weakening trend of the yen. Japan just released new data showing headline inflation at 2.5% – marking the lowest level since April and 0.5% lower than the previous month. Core inflation also decreased significantly. This news could be a signal that the Central Bank of this country (BOJ) does not need to raise interest rates any further.
In early August, the BOJ’s small interest rate hike caused the yen to jump and global markets, including Bitcoin, to collapse within days. However, the yen peaked in mid-September at around 140 against the USD and has weakened almost continuously since then. After the above news, Japan’s currency also dropped to 150 VND compared to the green banknote, the weakest level since early August.
“Japan does not have an inflation problem and there is little urgency to tighten monetary policy,” said Bob Elliott, CIO at Unlimited Funds. He noted that services inflation has fallen to near zero in recent months, while Japan’s GDP has fallen into negative growth.
Over the past five years, Bitcoin is up more than 1,000% against the yen, but much less than other currencies. Similar developments were seen in gold, which was 150% higher against the yen and only 80-90% higher than other popular currencies.