Bitcoin

Bitcoin barely reached 2% of gold’s market cap, new data shows

Bitcoin (BTC) has a lot more to do to absorb as much as 10% of the gold market capitalization than claims from old datashows a popular indicator.

Highlighting the figures of the capitalization realized by Bitcoin on January 12th, Ki Young Ju, CEO of the chain analysis resource CryptoQuant, said the cryptocurrency had taken much less of the gold market cap than previously claimed.

The realized capitalization cools the Bitcoin numbers game

When the price of Bitcoin soared towards the end of 2020 and hit an all-time high of $ 42,000 last week, A narrative emerged that investors were trading gold for BTC and that Bitcoin had taken about 7% of the precious metal’s market capitalization of $ 10 trillion.

Bitcoin barely reached 2% of gold’s market cap, new data shows
Bitcoin barely reached 2% of gold’s market cap, new data shows

With realized capitalization, calculates market capitalization in a different and more accurate way, the actual “theft” of gold is actually 2%, says Ki.

In contrast to market capitalization The metric measures the price at which each bitcoin last moved and excludes coins on central escrow exchangesand thus excludes speculative movements. The sum is also kept low by the amount of BTC that was lost a long time ago and that has recently moved at prices that are likely much lower than they are today.

“People said that BTC took 7% of the gold market capitalization. No it is not. There are unclaimed, unreachable, and lost bitcoin. After the limit it is only 2% “, tweeted together with a diagram of the realized limits.

“If digital gold replaced 10% of the market cap of XAU $, the price of BTC would be $ 154,000.”

Realized capitalization graph of Bitcoin. Source: Ki Young Ju / Twitter

Bitcoin’s realized limit on Wednesday was $ 227 billionThe standard market cap was $ 645 billion.

BTC’s performance clearly outperforms gold

Despite its potentially slower progress, Bitcoin is still doing very well against gold. that he couldn’t make up for his losses in BTC numbers despite the BTC / USD pair falling to nearly $ 30,000 on Monday.

Bitcoin was enough to buy 18.6 ounces of precious metal at the time of this writing, according to Buy Bitcoin Worldwide.

Bitcoin’s correlation with gold tended towards zero this week, well below the highs in October.

Bitcoin 90 Day Return Correlation Chart. Source: Digital Assets Data

Previously, Commentators noted that Bitcoin already has transfer the total market capitalization of $ 10 trillion for gold in its 12 year history.

As Cointelegraph reported, however, Criticism from gold fans remainsand the gold lover Peter ship, raises doubts about Bitcoin’s safe haven status and the interest of institutional investors in it.

“Bitcoin was trading near $ 42,000 on Friday and near $ 30,000 on Monday. An asset that falls 28% in a weekend is not a safe haven, a store of value or a viable hedge against #inflation “, tweeted in this week.

“If you want to bet on #Bitcoin, buy Bitcoin. But if you want to protect yourself from inflation, buy gold. “

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