BITCOIN AND GOLD HAVE MAINTAINED STABILITY AHEAD OF THE U.S ELECTIONS.
Bitcoin (BTC) recovered above $70,000 with low volatility metrics. A similar gradual climb is happening for gold, showing both assets do not expect unusual price swings ahead of the United States Of America Presidential elections.
Both gold and Bitcoin (BTC) continued to expand with low volatility, suggesting a limited probability for price swings ahead of November 5.
In the last stretch ahead of the US Presidential vote, the assets extended their gains while volatility decreased in the short term.
The Bitcoin volatility index fell off a cliff in October and is down by 50% for the past four weeks.
The BTC volatility shrank to 1.5%, retaining its overall downward trend. BTC remains at $2,000 under its all-time high at the end of October, but the gains were relatively gradual.
BTC no longer sees a rush of buyers, but a months-long accumulation by whales. The low volatility comes at a time when BTC is also gaining in mindshare on social media, potentially creating new FOMO.
However, this time, the BTC buying may come from whales, who are careful enough not to cause big price fluctuations.
The recent expansion benefits long-term holders, while miners have also moved into a more lucrative price range, potentially breaking even with BTC above $70,000.
BTC is no longer in a period of uncharted price discovery, and instead trades in a range, with the occasional breakout.
Gold, until recently drifting sideways, is now outperforming in the short term, driven by ETF demand, as well as physical gold opportunities.
Gold was more volatile overall in 2024, due to its rapid appreciation, but the index sank again in the past week.
Gold traded at 2,751.72 per ounce, near the higher range for 2024. Gold achieved over 33% gains in the year to date, while BTC gained more than 88% net after its latest rally.
Both assets were among the top performers for the year, suggesting a response to potential uncertainty and inflation. BTC and gold may be prepared to post a series of all-time records, accelerating ahead of the November 5th Polls.
BTC and gold also broke away from crypto as traders abandoned lagging altcoins. Interest in BTC also increased after Ethereum (ETH) failed to outperform based on its set of bullish predictions.
ETH and altcoins lagged behind gold, which also enjoys more significant mainstream demand.
BTC and gold have been compared as potentially disparate assets. One of the arguments in favor of BTC is its extremely low annual inflation rate of 1.8%. The rate of new BTC creation is extremely slow after the 2024 halving.
In the past year, there were several periods where either gold or BTC outperformed. But in the final stretch, both assets increased their correlation and moved toward all-time records.
Both BTC and gold went through their year of the ETF, where the funds were one of the major drivers of demand.
Gold, with its difficult spot logistics, enjoyed renewed inflows into ETF in October. The Bitcoin ETF also enjoyed active inflows, with ongoing buying from BlackRock.
Spot Bitcoin ETFs have rallied to be powerhouse investment vehicles, accumulating 938,000 Bitcoin worth $63.3 billion in the first year of trading.
That represents 4.5% of Bitcoin's total circulating supply, with wider crypto investment funds pushing the total to 1.1 million Bitcoin.
According to a report by Binance Research, the first Gold ETF that went live in 2005 drew in a then-record $1.5 billion in its first year. In contrast, Bitcoin ETFs have already captured more than $21 billion in inflows in just 10 months of action with unparalleled investor appetite.
However, on the Contrary, Ethereum spot ETFs have failed to gain much traction, recording more than $103 million in outflows since their launch, with negative flows dominating eight of the 11 weeks of trading.