Author: Yashu Gola, CoinTelegraph; Translated by: Deng Tong, Jinse Finance
Summary
Bitcoin's historical performance has been better than gold, recently outperforming gold by six times.
Gold prices approaching $5,000 may lay the foundation for a significant Bitcoin surge.
A weakening US dollar and increased global liquidity remain the primary drivers for both assets.
Gold prices approaching $5,000 per ounce or higher have become a hot topic among hard asset bulls, including Ed Yardeni, head of Yardeni Research, and billionaire investor John Paulson.
But what would happen to Bitcoin's price, often referred to as "digital gold", if this precious metal's price continues to surge?
Last Time Gold Rose, Bitcoin Price Increased 6-Fold
Historically, when Bitcoin and gold markets rise simultaneously, Bitcoin's gains far exceed gold's.
From March 2020 to March 2022, during the Federal Reserve's ultra-loose monetary policy, Bitcoin's price soared by approximately 1,110%, while gold only increased by 35.5%.
XAU/USD and BTC/USD Weekly Chart with Global M2 Supply. Source: TradingView
In the rebound from November 2022 to November 2023, coinciding with an increase in global money (M2) supply, gold rose by about 25%, while Bitcoin increased by 150%, nearly 6 times.
If gold prices rise from the current approximately $3,265 to $5,000, which is a 50% increase, then following historical patterns, Bitcoin's price could potentially surge by 300%, reaching $285,000 per BTC.
This aligns with analyst apsk32's Bitcoin price target, based on a power law model normalized by gold market capitalization.
Veteran Fund Manager: Gold Boom Will Drive Bitcoin to $250,000
Frank Holmes, CEO of US Global Investors, believes gold prices will rise to $6,000 during Trump's presidency, noting that gold price growth has lagged behind the massive increase in global M2 money supply.
He connects this bold target to Trump's tariff policies, suggesting these could lead to a roughly 25% US dollar depreciation, thereby enhancing gold's attractiveness, while central bank demand remains strong and investor positions are reduced.
Holmes predicts that Bitcoin might break through the oversupply at $97,000 and climb to $120,000-$150,000 in the short term, with a potential long-term target of $250,000 as adoption accelerates.
If gold's lagging correlation remains unchanged, Bitcoin's price could potentially break through $155,000.
In late April, gold prices reached a historical high of $3,500, rising 33.35% year-to-date. As of May 5th, gold prices had slightly retreated to $3,237. In comparison, Bitcoin has only increased by 0.82% year-to-date.
BTC/USD and XAU/USD Daily Chart Comparison. Source: TradingView
Some market observers, including analyst Cryptollica, note that Bitcoin has historically lagged behind gold, meaning if Bitcoin breaks out of its current consolidation range, it could potentially rise to the $155,000 level.
BTC/USD and XAU/USD Trend Comparison. Source: Cryptollica/X
Bitcoin's pullback from its approximately $110,000 historical high by 30% appears moderate compared to past selloffs exceeding 50%. This resilience enhances its standing alongside gold and increases the likelihood of Bitcoin following gold's rise if market conditions improve.
