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Writer's picturedatascienceinvestor

Bitcoin Hitting New High... Against Gold



We all know that the price of Bitcoin has been hitting ATH (All Time High) against USD in recent weeks. In fact, the latest ATH was just recorded on 22 Nov with a price of $99,645.


However, it has been quite a while since the price of Bitcoin hit a new high against the Gold price. The last ATH against Gold price was actually recorded in Nov 2021 so it has been around 3 years since the record was broken.


With Gold price soaring this year with ~30% gain YTD, this makes breaking the last ATH not exactly an easy task for Bitcoin.


Below is an illustration of how Bitcoin price fares against Gold price throughout the years on a linear scale.



ATH for Bitcoin to Gold ratio is ~36.8 and we are now hovering around 36.6. Hence, there is a great chance that an ATH will be reached very soon.


If we look at it from a log scale, here is how the chart looks like.



Bitcoin has come a long way. In 2011, it took less than 0.001 ounce of Gold to buy one Bitcoin. In current terms, it takes you more than 36 ounces of Gold to buy one Bitcoin.


If this number is to go up the log scale to reach 100 ounces of Gold to Bitcoin in the next 5 years, the price of Bitcoin can easily reach $400K to $500K assuming an historical CAGR of 11% for Gold.


Even then, the market cap of Bitcoin will still be less than 30% of the market cap of Gold. Though this could likely mean that Bitcoin will be the asset with the second highest market capitalisation in the world judging by today's ratio.


I think there is a good chance we would see Bitcoin reaching such ranks.



If you think that it's already too late to invest in Bitcoin, I'm not too sure.


Given a choice, would you rather invest in Gold or Bitcoin? Join this Telegram Group to see what the others think!


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