The surge in gold prices to its all-time high is of great importance for cryptocurrencies as well. As Bitcoin reaches its peak in 2023, the spot gold price also broke the record by surpassing $2074. What are the reasons behind this rise and what does it mean for investors?
Last year, gold closed in the red for seven consecutive months from April to October, but it entered a rapid recovery process in 2023. Despite a slight dip in October, it surpassed the $2000 mark again and today it has reached over $2074. One of the main reasons for this rise was the Federal Reserve’s (Fed) reaching its peak and starting to count the days of decline.
Cryptocurrencies also recovered strongly in 2023 despite their unique challenges. Powell’s recent statements and positive data for risk markets in the past weeks indicate that the recovery can continue for both assets in the coming months.
Bitcoin and gold, which react similarly to the Fed’s decisions, suggest that stronger rallies can occur next year as interest rate cuts begin. Those who struggle to understand the relationship between gold and BTC can look at the dollar index graph (below). As BTC and gold prices rise, DXY has started to return to the 102.5 region.
The all-time record of gold prices also affects the cryptocurrency markets. The recovery of gold and Bitcoin is in line with economic trends. Future financial forecasts will be shaped based on the Fed’s interest rate decisions.
