Sovereign wealth funds may be liquidating gold holdings to purchase Bitcoin (BTC), according to insights shared by Bitwise Head of Research Ryan Rasmussen. Highlighting this trend, a recent survey of 15 major institutions revealed that not a single one sold its Bitcoin holdings during the price decline from $125,000 down to $60,000. This behavior highlights remarkable confidence among institutional players, who the report indicates are swapping gold for Bitcoin as a protection against currency debasement. This dynamic raises questions about whether another major Bitcoin rally is on the horizon.
Will Bitcoin (BTC) see another Rally As Institutions Sell Gold For More Of The Cryptocurrency?
Bitcoin recently experienced significant upward momentum with surges in late August and early September. The cryptocurrency briefly pushed past the $87,000 threshold, though it could not break through $90,000, subsequently pulling back to $83,000. These upward movements were driven by a White House cryptocurrency event hosted by President Trump alongside expanded bond buybacks by the US Treasury. Yet, persistent high inflation triggered an interest rate increase, which typically creates headwinds for risk-on assets.
In the immediate term, Bitcoin could maintain its sideways price movement. The ongoing conflict between the US and Iran shows no resolution, and a formal agreement remains elusive. Although optimism for a ceasefire arose when Iran indicated it might open the Strait of Hormuz within a week contingent on its terms being met, a prolonged war coupled with elevated oil prices threatens to exacerbate inflation. Under these conditions, a strong Bitcoin rally remains improbable.
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Even so, numerous analysts maintain an optimistic outlook on Bitcoin. Bernstein forecasts that BTC will bounce back to reach $100,000 before the conclusion of the year. Achieving this $100,000 milestone could ignite a broader market bull run for the wider cryptocurrency sector. Conversely, if macroeconomic concerns intensify, Bitcoin might face a correction rather than an upward breakout.