Maruf Yusupov, co-founder of the gold-backed stablecoin Deenar, noted that gold's lower volatility compared to Bitcoin makes it more attractive amid market uncertainty.
Gold and Bitcoin Volatility
According to Yusupov, the reasons for Bitcoin's current trend are tied to the uncertainty surrounding the potential interest rate cut by the US Federal Reserve.
Gold and Bitcoin Prices
The fall of the Bitcoin price below the $60,000 mark on Sept. 15 triggered fears of another downfall among investors. Meanwhile, gold’s steady upward momentum made it a better investment alternative, as Yusupov notes that "investors are still cautious of general uncertainty." Gold recorded a 0.04% increase over the past day and is trading at $2,584 at the reporting time, per data from Trading Economics. The asset even reached an all-time high of $2,589 yesterday while Bitcoin hovered around the $58,000 zone, down by 22% from its ATH of $73,750.
Market Reaction to Uncertainty
Per a crypto.news report, spot BTC exchange-traded funds surpassed the $61 billion mark in terms of total assets under management, reaching 25% of the gold ETF AUM’s $257 billion in six months. The recent market-wide turmoil and mixed sentiment toward the US Fed rate cut brought increased outflows, with BlackRock surprisingly joining the outflow trend. Yusupov argues that while it's too soon to claim traditional investors are moving towards gold, market data generally favors this theory.
In uncertain market conditions, gold has shown better stability and lower volatility compared to Bitcoin, making it an attractive asset for investors looking to hedge their risks.
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