According to data provided by CryptoQuant, Bitcoin has decoupled from gold. While Bitcoin's price is down substantially from its peak in March, the yellow metal has recently hit a new record.
Gold and Bitcoin Price Dynamics
Earlier today, gold rallied to a new record peak of $2,800 per ounce. Meanwhile, Bitcoin is up a modest 1% over the past 24 hours, touching the $58,500 level. At press time, the cryptocurrency is down 20.6% from its record high of $73,737.
Market Reaction to Expected Fed Rate Cut
Gold has been rallying ahead of the U.S. Federal Reserve's widely expected rate cut, projected to take place later this September. According to Polymarket, traders are pricing in a 36% chance of a 50-basis point rate cut, with a 20-basis point cut remaining the likeliest scenario. Notably, palladium has also reached a two-month high, surging to $1,050 per ounce.
Expert Comments
According to CryptoQuant, the negative correlation between Bitcoin and gold has emerged due to a risk-averse interest rate environment. The firm noted that investors are leaning toward traditional safe-haven assets like gold. Prominent financial commentator Peter Schiff jokingly noted that Friday the 13th is a lucky day for gold investors as the yellow metal hit a new record high. Schiff also opined that those looking to buy Bitcoin in 2024 are 'very late' to the party.
In conclusion, it is noted that current market conditions significantly impact the price dynamics of both gold and Bitcoin. Investors continue to factor in economic conditions and the prospects of Fed rate cuts in their strategies.
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