Bitcoin (BTC) Surges to New All-Time Highs as Gold Market Invests Flock to Safe-Haven Assets

Gold has hit a new all-time high amidst global economic volatility. A boost in gold could signal a similar pattern in crypto, specifically Bitcoin.

Gold price, which traders watch closely for signs of deeper macroeconomic trends, rose to more than $3,390 on April 21 as more investors flocked to safe-haven assets amid increasing economic uncertainty.

According to the latest data from Trading Economics, gold reached a new all-time high as the U.S. dollar plummeted to a three-year low. At about 7:30 UTC, gold was seen trading up 2%, well above the $3,390 threshold and going as high as $3,395.

Earlier this week, President Donald Trump ordered an investigation into potential new tariffs on critical mineral imports, signaling a further escalation of the trade war between the U.S. and other countries, including China.

The presidential order comes as investors are starting to lose confidence in traditional fiat currencies. The greenback dropped to its lowest level since May 2017 and was last seen changing hands at $1.13.

As world powers engage in a fierce trade war and investors pour money into cryptocurrencies, these 5 key trends will be shaping the markets in 2023.

What is the historical relationship between gold and crypto?

Bitcoin (BTC) has often been likened to “digital gold” by market traders and investors. Federal Reserve Chair Jerome Powell also said that Bitcoin was a competitor for gold due to how both assets are used as a store of value rather than as a payment option.

Similarly, founder and CEO of ARK Investment Management Cathie Wood predicted Bitcoin’s $2 trillion market cap could one day surpass gold’s $15 trillion over time. Despite having been around longer, it evidently took gold a longer time to reach $2 trillion, something that took Bitcoin only 15 years.

“At $2,700, gold is a $15 trillion market, compared to Bitcoin at only $2 trillion. Even after breaking through $100,000, Bitcoin still is in early innings,” said Wood.

Historically, positive market movements in gold are often followed by a boost in Bitcoin prices not long after. Aside from the fact that both assets are seen as “safe havens” that protect investors against the volatility of traditional fiat currencies, both also have finite supplies that need to be mined.

Despite these similarities, a Bloomberg analysis found that gold still has a much lower volatility rate compared to Bitcoin; with gold’s annual volatility rate being around 10% to 20%, while Bitcoin often exceeds 50%.

But while this may be the case, analysts have also noted that macro Bitcoin trends have a tendency to follow gold’s within a few months.