Bitcoin price rallies as investors dump gold

TL;DR Breakdown

• Bitcoin price edges closer to $50,000 after investments from Tesla and MicroStrategy.
• Gold allocators at risk as crypto becomes a reserve asset.

Bitcoin price rallies around $50,000 due to traffic. 

Bitcoin’s price quadrupled since 2020 and its price has risen to more than 60% since the start of this year. The market value of Bitcoin surged to an all-time high of $49,951 late Monday, just inches away from the $50,000 level, according to the data from CoinDesk.

The leading cryptocurrency has gotten a big boost from news of large firms like Tesla, MicroStrategy, and MasterCard warming to cryptocurrencies. 

Current economic data shows that Gold underperforms other assets

Research by commodity futures trading commission shows a decline in hedge fund interests in the precious metal as focus shifts on rising nominal yields and the prospects of a better-than-expected US economic recovery. The data also revealed a drop in Gold futures short positions by 2,191 contracts to 47,093. The survey period saw an uptick in the Gold price as it attempted to push past its resistance level of $1,850 an ounce. Nevertheless, the market lacked enough inside momentum, which prompted the precious metal to correct lower in the afterwards sessions. 

According to Morgan Stanley, Gold price expects to go under $1,800 by the end of 2021. The bank said that the precious metal faces the prospects of a faster-than-expected US economic recovery and weaker inflation, which would reduce its demand against better bond yields. 

As at now, Bitcoin price has spiked from $29,000 to as much as $48,912 amid hopes of booming institutional adoption led by Tesla’s $1.5bn investment and MasterCard and BNY Mellon’s announcement to launch crypto-enabled services later this year. This recent development will lead bulls to see the cryptocurrency at tropospheric levels like $60,000, $75,000, and even possibly, $100,000.