As we move into Q3, we are seeing a shift in the crypto market. Bitcoin is still up, but is heading towards its first quarterly dip since early 2015. While Bitcoin’s value is sinking, silver (XAG) is rising. The price of the precious metal is up 38% year-to-date and is by far the strongest performer in the space. Bitcoin is not the only crypto that is down – Qtum is also losing value and XRP is also having its worst quarter since Q4 of 2014.
By now, most people are familiar with gold, the precious metal that has been around for thousands of years. Some think it’s silly to buy something like gold that has been around so long, but it’s worth noting that it still holds a lot of value when compared to other options, including Bitcoin.
Gold set another new all-time high in Q2, and this time it was a record high for the second quarter. Unlike Bitcoin, which has been sitting in a tight range throughout the last quarter, gold has been on a roller coaster ride, and it remains to be seen if the metal will pull back and return to its trend.. Read more about when to buy bitcoin 2021 and let us know what you think.Gold will outperform bitcoin (BTC) in the second quarter of 2021.
The ounce of gold rose from $1,707.45 at the 1st. April to over $1,750 in the current session on the 30th. June. This is an increase of approximately 3.9% from the previous quarter. Meanwhile, bitcoin has fallen more than 40 percent, to below $35,000 after reaching $65,000 in mid-April, all in the same period.
The inverse correlation between the bitcoin and gold markets rose sharply in April and May 2021. Analysts at JPMorgan noted in May that large institutional investors have pulled their money out of the overvalued cryptocurrency markets to seek growth opportunities in gold.
Citing data from the Chicago Mercantile Exchange (CME) on bitcoin futures, analysts at JPMorgan say investors have been liquidating their positions since October 2020. Meanwhile, inflows into gold-focused exchange-traded funds have increased alongside outflows from the bitcoin market. Here is an excerpt from the report:
The picture of bitcoin inflows continues to deteriorate, indicating a continued decline in institutional investors. Bitcoin futures markets saw the strongest and longest sell-off last month since bitcoin began rising last October.The U.S. dollar index reached a one-week high, while gold prices fell. Source: TradingView.com.
Gold has failed to break above its 100-day moving average in recent days, which is a bearish sign, Fritsch told Bloomberg. The risk now is that ETF investors who are still patient will jump on the bandwagon and sell their holdings. This will reinforce the downward movement.
At the same time, bitcoin bulls have received similar warnings, with the cryptocurrency repeatedly at risk of falling below $30,000, a psychological support level.
Jill Carlson, a partner at Slow Ventures, told CNBC that the outflow of institutional money from the bitcoin market has increased recently, adding that traders should be cautious with the cryptocurrency.
Clem Chambers, CEO of financial analysis portal ADFVN.com, predicted a continued decline in bitcoin, noting that a move below $30,000 would put the cryptocurrency on its way to $20,000.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. So you need to do your own research before making a decision.
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