Bitcoin (BTC $16,522) is due to copy gold’s explosive 1970s breakout as it becomes the world’s “hardest asset” in 2024.

That was one forecast from the latest edition of the Capriole Newsletter, a financial circular from research and trading firm Capriole Investments.

Bitcoin due big moves "and more" in 2020s

Despite BTC price action flagging at nearly 80% below its latest all-time high, not everyone is bearish about even its mid-term outlook.

While calls for a further drop before BTC/USD finds its new macro bottom remain, Capriole believes that 2023 will be bright for Bitcoin as a reserve asset.

The reason, it says, lies in the world economy’s financial history of the past century, and in particular, the United States after the dollar deanchored from gold completely in 1971.

Gold, as the world’s premier safe haven of the time, saw “huge” gains during the decade, and fifty years later, it is Bitcoin’s turn.

“Because gold was much smaller in the 1970s (and Bitcoin today is even smaller by comparison), it had capacity to make big moves through a decade of inflation and high interest rates,” Capriole wrote.

That’s one reason why we believe Bitcoin will do the same, and more, this decade.

Accompanying charts underscored gold’s potential to repeat its 70s behavior, among which were a “cup and handle” chart structure playing out since 2010.

XAUUSD

XAU/USD 1-month annotated chart. Source: Capriole Investments

When it comes to Bitcoin vying with gold for the safe haven crown, meanwhile, the potential lies in the numbers — at just 2.5% of gold’s market cap, BTC diving 80% from its $69,000 peak last year has little bearing on the overall picture.

“Given Bitcoin represents just 2.5% of gold’s market capitalization today, its 80% drawdown adds a mere 2% additional drawdown to the combined hard money (gold + Bitcoin) drawdown,” the newsletter continued.

Giving a total hard money drawdown of 24% through to November 2022, comparable with the 1970 and 1975 figures for gold.

Should the stage already be set for a Bitcoin copycat move of 70s gold, the growth potential is thus all the more impressive — even now, Bitcoin’s market cap is just 10% that of gold before its bull run of the time began.

“Bitcoin has more growth potential than gold because it is smaller. A like-for-like demand in both assets will result in a 40X greater price change for Bitcoin,” Capriole stated.

"The hardest asset in the world"

A further key argument echoed that long championed by commentators such as Saifedean Ammous in the popular book, “The Bitcoin Standard.”

Related: Bitcoin price 'easily' due to hit $2M in six years — Larry Lepard

There, the debate focuses on investors' shift to Bitcoin as its inflation rate drops below that of gold, increasing its monetary "hardness" versus the metal.

There are many other attributes that make Bitcoin stand out from gold, such as its equitable decentralization, ability to transfer instantaneously and be used for micro-payments. But most importantly, Bitcoin is harder than gold.

This, Capriole added, will confirm Bitcoin as “the hardest asset in the world” at its next block subsidy halving in 2024.

“All-in-all, gold went up 24X in the 1970s,” Capriole summarized.

Now imagine the 2020s, where the Fed can’t afford to be as aggressive (debt is way higher today) and we have digital, accessible, harder money: Bitcoin.

BTC

BTC/USD chart with Bitcoin, gold inflation rate data. Source: Capriole Investments


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch

Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch

Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.

More Bitcoin News
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins. 

More Bitcoin News
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction

Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction

Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.

More Solana News
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs

SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs

The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.

More Cryptocurrencies News
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP