Bitcoin and Gold Ratio Hits 19.8 Ounces Amid Fed Rate Hikes
Bitcoin's ratio to gold has surged to 19.8 ounces, its highest level since the February low of 12 ounces. This increase is significant because it indicates that both assets are being viewed as safe-havens by investors.
The ratio has been on a tear, climbing from its all-time high of over 40 ounces to its current level. Despite this, the value of Bitcoin and gold is being tested by the Federal Reserve's hawkish tilt. The central bank raised interest rates by 25 basis points in September, which has led to a decline in the value of both assets.
Gold has seen a 2.3% gain to $4,360 on September 17, but its appeal is being diminished by rising real yields. Central banks are still purchasing gold at a steady rate, with 289 tons bought in the second quarter. However, ETF outflows from North America have been significant, totaling $7.7 billion.
Bitcoin's recovery has been fragile, with the price reaching $85,000 but remaining down for the year. The asset is being viewed as a long-term risk asset rather than a hedge against rate hikes. The 19.8 ratio indicates that investors are still cautious and are seeking safe-havens.