Bitcoin Nears 20 Ounces of Gold as Rate Hike Cycle Tests Both Assets

Bitcoin's ratio to gold has reached 19.8 ounces, its highest level since February when it fell to 12 ounces. This surge in value comes as both assets face significant challenges from rate hikes and inflation expectations.

The Federal Reserve's recent rate hike of 25 basis points and revised target range of 3.75-4% have increased the opportunity cost of holding non-yielding assets, making gold less attractive to investors.

Gold ETF outflows totaled $7.7 billion in the first half of the year, while central banks purchased 289 tons of gold in the second quarter, with Poland and China being major buyers.