Bitcoin’s market capitalization has skyrocketed by an astounding 350,000% since its inception, especially when compared to its traditional safe-haven rival, gold.
Recent signals suggest that Bitcoin may be on the verge of another extended price rally, indicating renewed momentum against the precious metal.
According to veteran market analyst Peter Brandt, the BTC/GLD ratio chart compares the performance of these two assets and could serve as a barometer for gauging Bitcoin’s adoption rate relative to gold. For instance, an increase in this ratio reflects Bitcoin outperforming gold in market cap performance, and vice versa.
Brandt predicts that the Bitcoin-to-gold ratio may rise by more than 400% in 2025, supported by a classic technical pattern. This pattern, known as the inverse head-and-shoulders (IH&S), develops when the price forms three consecutive troughs, with the middle trough—referred to as the head—being deeper than the left and right shoulders.
As per technical analysis rules, an IH&S pattern resolves when the price breaks above the neckline, accompanied by a rise in trading volumes. In this scenario, the price can rise as much as the maximum distance between the neckline and the head’s deepest point.
Applying this principle to the BTC/GLD ratio chart suggests an upside target of around 123. This means that by 2025, the price of 1 BTC may equal 123 ounces of gold, up over 400% compared to 24 ounces as of September 22, 2024.
The prospect of Bitcoin overtaking gold has gained traction due to its rapid adoption, particularly by institutional investors and the launch of Bitcoin exchange-traded funds (ETFs), which have enhanced Bitcoin’s role in investment portfolios.
Since January 2024, the approval of Bitcoin ETFs has led to inflows exceeding $17.69 billion, with projections indicating that the Bitcoin ETF market could reach as much as $220 billion by 2027, using gold ETFs as a benchmark.
Experts like Anthony Scaramucci argue that Bitcoin will eventually surpass gold’s market capitalization within the next decade, citing advantages such as scarcity and portability.
