Gold’s Lower Volatility Compared to Bitcoin

Gold’s lower volatility than Bitcoin gives it an edge during times of market uncertainty, according to Maruf Yusupov, co-founder of the gold-backed stablecoin Deenar. Yusupov explains, “The reasons for this Bitcoin trend are not far-fetched and are hinged on the uncertainty surrounding the potential interest rate cut from the US Federal Reserve.”

On September 15, Bitcoin’s price fell below the $60,000 mark, triggering fears of another major decline among investors. In contrast, gold’s steady upward momentum made it a more appealing investment alternative, as “investors remain cautious of general uncertainty,” Yusupov notes.

Gold recorded a 0.04% increase over the past day and is trading at $2,584 at the time of reporting, according to data from Trading Economics. The asset even reached an all-time high of $2,589 yesterday, while Bitcoin struggled around the $58,000 zone — down by 22% from its all-time high of $73,750.

Gold as a Hedge Against Uncertainty

Yusupov emphasizes, “The limited volatility of gold has made it an attractive alternative in the push to hedge against underlying uncertainty.”

According to a report, spot Bitcoin exchange-traded funds (ETFs) surpassed the $61 billion mark in terms of total assets under management, reaching 25% of the gold ETF AUM’s $257 billion in six months. Despite this, the recent market-wide turmoil and mixed sentiment toward the U.S. Federal Reserve’s potential rate cut have led to increased outflows, with BlackRock surprisingly joining this trend.

“Though it is too soon to claim that traditional investors are moving toward gold, the market data generally favors this theory.”

Current Market Status

Bitcoin recorded a 0.24% dip in the past 24 hours and is trading at $58,500 at the time of writing. The cryptocurrency market cap declined by 1.2% and is currently sitting at $2.13 trillion, according to CoinGecko.

The downward momentum comes amid mixed reactions toward the expectations of a 50 basis point rate cut by the U.S. Federal Reserve.

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