The month of October marked the recovery of the stock market by Bitcoin (BTC) with endless records. Besides the decorrelation with the S&P 500 Index, the cryptocurrency has shown dominance similar to that recorded since 2017 and its record price. Another illustration of the asset’s return to form is that it continues to gain ground, now ahead of gold. For the CEO of Real Vision Group, Raoul Pal, this is a harbinger of a bullish cycle for bitcoin. The latter is not the only one to expect an explosion in asset values at the end of the year. Explanations.
The reasons for Bitcoin’s current dominance
There is certainly cause for celebration among bitcoin supporters given that the asset outperforms gold and US stocks. A situation that owes its existence to three major factors that together influenced the perception of the market. The first factor is nothing other than the integration of cryptocurrencies into the values supported by the PayPal payment service. Comes next the growing interest of institutions in Bitcoin, who have continued to invest more in assets like Square, MicroStrategy and Stone Ridge. Finally, there is the significant optimism aroused by high-frequency bitcoin charts after hitting $ 12,000.
A situation which led Mr. Pal posted the following tweet: “ Gold collapses against bitcoin, as expected cc: @michael_saylor Everyone takes note. The next thing I’m waiting for, It is that the correlations between BTC and the dollar and between BTC and stocks are also collapsing... let’s see. #Bitcoin ”. If both events come to pass, which appears to be the case, the individual and the trading community will expect the intensification of bitcoin’s breakthrough.
The entry into play of large investors: a determining factor
Long reluctant to take a significant position in assets, it now seems that large investors have let themselves be convince by its potential. The fact that they didn’t expect assets to outperform gold, but that they are precursors is a strong signal sent to the market. We will already remember that Mr. Pal recently suggested that companies like Apple and Microsoft should invest in assets to hedge against inflation. Now that Bitcoin continues to gain ground against gold and stocks, prominent investors are further expressing their support for cryptocurrency.
If bitcoin continues to perform like this at the expense of gold, it will undoubtedly strengthen its image as a safe haven in the market. The direct consequence would then be the influx of capital from investors wishing to protect themselves from the dollar which seems to be losing momentum.