The recent surge in gold prices has sparked interest in the potential impact on Bitcoin (BTC) prices. With gold reaching a new record high of $3,500 per ounce, driven by bets on upcoming Fed rate cuts, investors are wondering if BTC will follow suit. Historically, BTC has shown a tendency to lag behind gold initially, only to surpass it on a six to 12-month horizon.
Bitcoin’s Past Performance After Gold’s All-Time Highs
In August 2011, when gold reached $1,921, Bitcoin rose by 145% a year later. Similarly, after gold’s all-time high of $2,070 in August 2020, BTC gained 68% in six months and 315% in 12 months. Recently, when gold achieved a record high of $3,500 in April, BTC rose by around 35% in the next three months. These patterns suggest that gold sets the tone, but Bitcoin often takes the lead.
The average return of BTC following gold’s all-time highs is around 30% after three months and 225% after 12 months. This is because gold is traditionally the first choice for investors seeking safe-haven assets, but as gold’s price rises, investors often look to Bitcoin for potentially higher returns, viewing it as “digital gold” with greater risk.
Projected Bitcoin Price Based on Historical Trends
If the historical trend repeats, BTC’s price could reach $135,000 to $145,000 by the beginning of December, representing a 30% median gain over three months from its current level near $110,000. However, if BTC repeats its historical gains of 145% to 304% observed after past gold highs, its price could soar to the range of $200,000 to $400,000 in the next year.
Xau/USD Daily Price Chart. Source: Tradingview
These projections are based on the assumption that the macroeconomic environment will continue to favor safe-haven assets. However, it’s essential to note that there are risks involved, including a bearish divergence in Bitcoin’s weekly chart, which could lead to a decline.
Xau/USD against BTC/USD two-week price diagram. Source: Tradingview
Conclusion and Risks
While historical trends suggest that Bitcoin’s price could rise significantly in the coming months, it’s crucial to remember that every investment and trade move carries risk. Investors should conduct their own research and consider multiple factors before making a decision. The futures market is currently pricing in a 90% chance of a Fed rate cut in September, which could impact the price of BTC.
BTC/USD Weekly Price Chart. Source: Tradingview
For more information on the potential impact of gold prices on Bitcoin, visit Cointelegraph.
BTC/USD Weekly Price Chart. Source: Tradingview
