Bloomberg Buys Into Idea of Bitcoin Overtaking Gold

The notion that Bitcoin (BTC) is steadily claiming market shares from gold—which has recently been peddled by JPMorgan—appears to have been adopted by Bloomberg strategists. The bank also believes that this investment outflow could have adverse effects on the price action of the yellow metal.

In Bloomberg’s February report, the company suggested yet another narrative, noting that despite the increase of funds pouring into Bitcoin, the cryptocurrency is still smaller in size compared to gold. That said, this could make BTC an even more attractive investment vehicle for institutional investors, considering the prospects for growth the cryptocurrency has.

The strategists analyzed the performance of Grayscale’s Trust (GBTC) and every exchange-traded fund (ETF) that tracks gold. GBTC’s AUM recently climbed above $24 billion, representing just 12% of the $210 billion in gold-tracking ETFs. This figure also highlights GBTC’s extraordinary growth in the past year, as its market capitalization was around just 1% of gold ETFs about a year ago.

Furthermore, the analysts seemed more optimistic about Bitcoin’s price developments in comparison with gold’s value.

Meanwhile, their opinion is based on the benchmark cryptocurrency’s deteriorating volatility against gold, which bears “potential for the Bitcoin price to accelerate its advance vs. gold and to add another zero.”

Earlier today, the trading pair BTC/XAU hit a fresh all-time high of over $22, according to MarketWatch.

Key BTC Levels to Watch — February 7

Bitcoin traded very positively over the weekend and recorded a fresh four-week high around $41,000 yesterday. However, the cryptocurrency got stalled and resisted by fresh supply at the $41k area, sending the cryptocurrency below the prevailing trendline and to the $37,827 support area.

That said, we expect a rebound in the coming hours to the upper-$40k area, else the cryptocurrency risks going under the $36k support once again.

Meanwhile, our key resistance levels are at $39,800, $41,200, and $42,000. While our key support levels are at $36,000, $35,000 and $34,100.

Total Market Capitalization: $1.17 trillion

Bitcoin Market Capitalization: $705 billion

Bitcoin Dominance: 60%

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