Gold Sets Record High Ahead Of Second US Stimulus, Will Bitcoin Follow?
Today, the United States is expected to introduce the details of its latest economic stimulus package. Ahead of the expected record bout of money printing, hard assets like Bitcoin, gold, and silver began soaring.
Overnight, gold set a new all-time high price record. Meanwhile, Bitcoin may have broken out from a multi-year triangle formation that could signal the start of a new bull run. Will the cryptocurrency follow precious metals and set a new all-time high in the days ahead?
Precious Metals, And Other Hard Assets Rise Ahead Of Expected US Stimulus Package
Across the country, cases of the pandemic have once again begun surging, prompting many states to reimpose lockdown like conditions. The resurgence comes just as other states had been rolling out reopening widespread reopening plans.
A return to quarantine line conditions could keep jobless claims rising and the economy on thin ice. To give the economy a much-needed shot in the arm, the United States government is expected to introduce the second round of stimulus checks aimed at individuals today.
RELATED READING | WHY THE SECOND U.S. STIMULUS ROUND COULD STIMULATE A BITCOIN RALLY
The last round of checks reached as high as $1,200 for individuals earning below a certain income threshold. Exact details of the latest stimulus package are expected to differ from the last round of checks.
Both efforts to stimulate the economy have had a secondary effect of stimulating growth in the price of hard assets like Bitcoin, gold, and silver.
Bitcoin: Proving All That Glitters Doesn’t Have To Be Gold Or Silver
Last week, ahead of the details being revealed, silver (XAGUSD) went on an explosive rally. Overnight last night, gold soared above its previous all-time high, setting a new record.
Just recently, a research report revealed that as of early July, gold, (XAUUSD) was neck and neck with Bitcoin (BTCUSD) in terms of two-year performance.
RELATED READING | WHY SILVER’S PERFECT STORM SURGE WON’T SPILL INTO CRYPTO
Both Bitcoin and precious metals were at a relatively comparable price point two years ago, just as trade tensions began to boil between the US and China.
XAUUSD / XAGUSD / BTCUSD Two-Year Performance Comparison Chart | Source: TradingView
Following gold’s incredible breakout, the asset is now well above Bitcoin’s performance in the same timeframe. Bitcoin’s performance more than doubles silver’s in the same timeframe.
But it is clear that digital gold, Bitcoin, has its share of catching up to do against its physical counterpart. Gold’s recent uptrend has been powerful enough to take the precious metal to a new all-time high. Bitcoin may be breaking from a multi-year triangle formation, just as more money supply will begin flooding the market.
BTCUSD Multi-Year Triangle Breakout Chart | Source: TradingView
Bitcoin was designed to be digitally scarce, limited to just 21 million BTC. Will this important factor that makes it closely resemble gold and silver, cause the cryptocurrency to rise with the same stimulus-fueled tide? And like gold, will Bitcoin soon set a new all-time high once more money supply enters the economy?
The days ahead in Bitcoin are critical in terms of the asset proving itself as digital gold.
Featured image from Deposit Photos.