Bitcoin is experiencing increased demand on Tuesday as the historic rise in precious metals sees a significant reversal.
Gold experienced a 5% drop to $4,130, marking its largest daily decline in years. Silver also faced a nearly 8% drop. These metals had surged in recent months due to central banks shifting to monetary easing, escalating trade tensions between the U.S. and China, and indications of liquidity and credit stress within the financial system. Unfortunately for bitcoin advocates, these factors have not significantly influenced the largest cryptocurrency, which has largely remained within a narrow trading range for months, aside from a few brief spikes.
Now that the metals have temporarily lost their appeal, funds are flowing into bitcoin, which has rebounded to $112,700 after briefly falling below $108,000. Ether also recovered from its overnight drop, bouncing back above $4,000.
Quinn Thomson, the founder of hedge fund Lekker Capital, indicated last week that BTC is likely to catch up to gold’s rise. Charlie Morris, CIO of ByteTree, added that bitcoin’s opportunity for a significant rally will arise when gold begins to consolidate.
Stocks associated with crypto haven’t reflected this news, with most trading lower on Tuesday, particularly bitcoin miners, many of which are now seen as AI infrastructure plays.
IREN (IREN), Hut 8 (HUT), and Bitfarms (BITF) have declined by 3%-4%. Circle (CRCL), a stablecoin issuer, is down 1.2%, while Coinbase (COIN) has slipped by 0.5%. Michael Saylor’s Strategy (MSTR) is managing a 1.7% gain.
Read more: Bitcoin’s October Slowdown Masks Strength, Analysts Predict Catch-Up With Gold
