Bitcoin gains spark debate over gold’s future

Gold dropped to a one-month low of $2,543 on 14 November, following the release of the US Consumer Price Index report, which confirmed inflation at 2.6% for October. Despite a brief recovery to $2,623, the precious metal remains 2.6% lower over the past month. Meanwhile, Bitcoin soared to a record-breaking high of over $93,400, underscoring its growing appeal as a digital alternative to traditional inflation hedges like gold.

Experts suggest this trend could continue, as Bitcoin’s higher yield and appeal as a diversification tool attract investors. Maruf Yusupov, co-founder of the gold-backed stablecoin Deenar, noted that Bitcoin’s rising popularity may challenge gold’s long-standing dominance as an inflation hedge. The Federal Reserve’s hawkish policies and the strengthening US dollar are also likely to weigh on gold’s attractiveness.

Adding to the momentum, Republican Senator Cynthia Lummis recently proposed selling some of the US Federal Reserve’s 8,133 tonnes of gold reserves to invest in Bitcoin as a national reserve asset. The proposal reflects a shifting perspective among policymakers, signalling a potential long-term shift in investment strategies.