The Thesis of a Major Retracement in the BTC/Gold Ratio
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, highlights a concerning divergence between Bitcoin and gold. The BTC/Gold ratio, which measures how many ounces of gold equal one Bitcoin, has reached historic highs before showing signs of technical weakness. McGlone identifies a key resistance around 30 ounces of gold per Bitcoin. A level that the market is struggling to sustainably break through.
This technical resistance coincides with a sentiment shift in traditional markets. Central banks have been massively accumulating physical gold since 2022, with over 1,000 tonnes purchased in 2023 according to the World Gold Council. This institutional demand firmly supports gold prices. Meanwhile, Bitcoin faces regulatory pressures and decreasing liquidity in crypto markets.
The critical support lies around 15 ounces of gold per Bitcoin, representing a potential 50% decline from recent highs. This zone also corresponds to Fibonacci retracement levels that have historically served as floors during previous Bitcoin bear markets.
Why Gold is Regaining the Edge Over Bitcoin
The current macroeconomic environment clearly favors traditional safe-haven assets. Gold benefits from several simultaneous catalysts: persistent geopolitical tensions, growing budget deficits in developed economies, and increased distrust of digital assets following recent scandals in the crypto sector.
Bitcoin’s volatility remains its Achilles’ heel compared to gold. Over the past 90 days, BTC has recorded daily swings exceeding 5%, while gold typically fluctuates below 2%. This volatility difference drives pension funds and corporate treasuries toward precious metals rather than cryptocurrencies. Investment flows into gold ETFs have largely surpassed those of spot Bitcoin ETFs since their launch.
McGlone also emphasizes that the correlation between Bitcoin and technology stocks remains high, compromising its status as an independent safe haven. During risk-off phases, BTC often follows the Nasdaq downward. Unlike gold, which fully maintains its role as portfolio protection.
Can Bitcoin Bulls Invalidate This Scenario?
Despite this bearish prediction, several bullish factors could reverse the trend. Bitcoin’s halving and growing institutional adoption via spot ETFs constitute solid arguments for the bulls. On-chain data shows that long-term holders continue to accumulate, with more than 70% of the circulating supply remaining unmoved for at least six months.
Innovation in the Bitcoin ecosystem, particularly with the Lightning Network and layer 2 solutions, strengthens the network’s value proposition. If Bitcoin demonstrates increasing utility beyond store of value, it could decouple from gold and justify a valuation premium.
The central question remains whether these technological developments will materialize quickly enough to counter the macroeconomic pressures identified by Bloomberg.
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