Gold's single-day surge rivals Bitcoin's total market capitalization
Over a five-year period, gold has now surpassed Bitcoin's performance, climbing 173% compared to Bitcoin's 164% gain during the same timeframe.
On Wednesday, Bitcoin experienced downward price movement as gold surged by 4.4% within a 24-hour period, resulting in an extraordinary $1.65 trillion addition to the precious metal's overall market capitalization in just one day.
The price of gold surpassed the $5,500 threshold, establishing a fresh all-time high, while its aggregate market cap climbed to $38.77 trillion, with the one-day gain approaching Bitcoin's (BTC) entire $1.75 trillion market capitalization, according to data from Infinite Market Cap.
Silver has also experienced impressive gains, surging 21.5% throughout the past week to reach a market capitalization of $6.6 trillion, which has widened its advantage over Nvidia — currently the world's most valuable publicly traded corporation — even further.
The sustained rally in precious metals spanning multiple months — widely viewed as a manifestation of the "debasement trade" phenomenon — stands in stark contrast to Bitcoin's performance, which many analysts contend should similarly function as a safe haven investment vehicle.
Bitcoin's price has faced difficulty gaining upward momentum since the beginning of October, when the cryptocurrency market experienced a significant crash that resulted in the liquidation of over $19 billion in trading positions.
Prior to the market crash on Oct. 10, market participants had been increasingly adopting the perspective that both Bitcoin and gold would function as debasement hedges during times characterized by fiscal mismanagement and monetary policy expansion.
The existing performance differential between gold and Bitcoin becomes even more pronounced when examined through a five-year lens, with gold demonstrating superior returns compared to Bitcoin across the past five years, appreciating by 173%, whereas Bitcoin has gained only 164%.
Institutional investors view Bitcoin as undervalued, survey reveals
Despite this trend, a Coinbase survey published at the beginning of this week revealed that 71% of 75 surveyed institutional investors believe Bitcoin is currently undervalued at price levels ranging from $85,000 to $95,000.
Approximately 80% of these institutional investors indicated they would either maintain their existing cryptocurrency holdings or increase their positions if the crypto market were to decline by an additional 10%, demonstrating sustained long-term confidence in the digital asset category.
Contrasting sentiment between Bitcoin and gold investors
The divergence in market confidence between Bitcoin and gold has been equally evident when examining various sentiment measurement tools.
The Crypto Fear & Greed Index, a metric designed to gauge Bitcoin and overall cryptocurrency market sentiment, presently registers at 26 out of 100, placing it firmly within the "Fear" territory, whereas JM Bullion's Fear & Greed Index measurement for gold stands at 99 out of 100, situated in the "Extreme Greed" category.
