If you want to know where gold is going, follow bitcoin, say analysts

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(Kitco News) – If gold investors want to know where the precious metal is headed, some market analysts are saying that they should be taking a look at bitcoin.

According to some analysts, the investment debate between bitcoin or gold is quickly disappearing as both assets are now reacting to the same motivations: the global currency debasement race.

Bitcoin has been surging higher since mid-October, seeing five weeks of consecutive gains. Currently trading at $15,432 a token, bitcoin is trading at its highest level in two years.

Analysts say that like gold, cryptocurrencies are benefiting from the massive fiscal and monetary stimulus that has been pumped into financial markets, to support the global economy devastated by the COVID-19 pandemic.

“I wouldn’t call bitcoin the new gold because you can’t replace an asset that has for thousands of years been a store of value,” said Wells Fargo head of real asset strategy John LaForge. “However, Bitcoin is a digital store of value, and that is important for some investors. The correlation between bitcoin and gold has never been higher.”

Greg Harmon, founder of Dragonfly Capital, is also looking at bitcoin and gold as stores of wealth. He added that he sees the cryptocurrency leading the precious metal higher.

“Gold is a lot more established and is a much bigger market so it’s going to take time to get enough moment for a big move. Bitcoin is a lot more agile. Gold is like a supertanker in the ocean, and bitcoin is a coastguard vessel.”

As to how high bitcoin can go, Alex Mashinsky, CEO of Celsius Network, said in an interview with Kitco News that he sees prices at all-time highs next year. Many commodity analysts are expecting gold prices to push to new all-time highs by next year as well.

Looking at the technical chart of bitcoin, Jim Wyckoff, senior technical analyst at Kitco.com, said that the cryptocurrency has room to move higher.

“Bulls are in strong technical control as prices are in an uptrend on the daily chart. There are still no early chart clues to suggest a market top is close at hand,” he said.

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