Bitcoin to gold ratio posts new record as BTC sets new high

The Bitcoin to gold ratio, one of the key metrics measuring the purchasing power of Bitcoin relative to gold, hit a new all-time high (ATH) as the BTC price broke new records.

Veteran futures forex trader Peter Brandt took to X on Dec. 16 to report that the Bitcoin (BTC) to gold ratio had posted a new ATH.

The Bitcoin to gold ratio is a metric that divides the price of Bitcoin by the cost of spot gold and represents the number of ounces of gold it takes to buy 1 BTC.

On Dec. 16, the ratio hit a new ATH at 40 gold ounces per BTC as Bitcoin peaked above $106,000 for the first time, with spot gold (XAU) trading at around $2,650.

“Next stop will be 89 to 1”

Highlighting the new historic record in the BTC to gold ratio, Brandt expressed confidence that the metric will continue to grow.

“Next stop will be 89 to 1 — it will require 89 ounces of gold [to buy 1 BTC],” Brandt predicted.

Bitcoin to gold ratio posted a new ATH. Source: Peter Brandt

Brandt’s prediction aligns with a popular narrative within the cryptocurrency community highlighting Bitcoin’s potential to capitalize on gold’s $15 trillion market.

Bitcoin, priced at $104,690 at the time of writing, has a market value of about $2.1 trillion. The gap in the market capitalization of the two assets leaves Bitcoin with considerable potential to grow, ARK Invest founder and Bitcoin bull Cathie Wood said in early December.

Related: Bitcoin may ‘pump then rotate back’ if US strategic reserve gets approved

Wood’s remarks came shortly after United States Federal Reserve Chair Jerome Powell referred to Bitcoin as a digital version of gold as BTC smashed the $100,000 price mark on Dec. 5.

Bitcoin passes the last difficulty adjustment in 2024

The new record in the Bitcoin to gold ratio comes at a time when mining new Bitcoin is becoming increasingly difficult.

On Dec. 15, the Bitcoin mining difficulty — a measurement referring to the difficulty level of finding the right hash for each block on the Bitcoin blockchain — edged up to a new historic high above 105 trillion, according to data from CoinWarz.

Bitcoin mining difficulty adjustments since July 2024. Source: MinerStat

Adjusted every 2,016 blocks, or roughly every 14 days, the next Bitcoin mining difficulty adjustment is scheduled to occur on Jan. 1, 2025.

Magazine: Bitcoin ‘demand shocks’ looming, Ripple stablecoin, and more: Hodler’s Digest, Dec. 8 – 14