There has been much debate over who will become the ultimate global store of value, gold or Bitcoin. The market is voting in favor of Bitcoin based on the latest technical developments on the Bitcoin to Gold ratio chart. Based on this analysis, we currently hold a long position in Bitcoin and a short position in Gold, I will try to explain this analysis as clearly and quickly as possible: Looking at the weekly ratio chart of Bitcoin to Gold, you will notice that 2021 is highlighted The triple top resistance level (upper limit) since 2009 has been breached. This suggests Bitcoin is outperforming gold and sitting at a significant technical resistance level formed by the triple top from three years ago. We first highlighted this macro ratio chart in this column on July 9. In the same article, we called for Bitcoin to hold support between $59,000 and $49,000 before hitting targets between $105,000 and $109,000. This target has not yet been achieved and we need to update the target resistance zone to higher levels Bitcoin is continuing to push higher and based on the rising price action and price structure I think it would be prudent to increase our target to the $129,000 range to $153,000 . We currently hold 3% of iShares Bitcoin Trust (IBIT) in the Inside Edge Capital Investor Growth Portfolio and intend to hold the position to see if we can test this target area. To further analyze our long Bitcoin/short gold thesis, I would like to suggest that gold is technically weak amid multiple macro forces and bulls should proceed with caution. As I said, I’m actually short gold right now. The chart below is a rather complex 20-year actual 10-year bond yield (calculated from the 10-year nominal bond yield minus the expected 10-year inflation rate) superimposed on the gold price. From 2024 onwards, the two markets have an inverse relationship. To make the comparison easier, I have inverted the price of gold on the chart to show that both are moving in the same direction. If you think about it intuitively, this makes sense. If real yields rise, then the real return on risk-free government bonds will increase, making a non-yielding gold investment less attractive. On the other hand, if real yields on Treasury bonds fall (whether due to lower nominal yields or increased expectations of coming inflation), then gold becomes more attractive. The past two years have seen a significant divergence, which has either been a decline in real yields or a higher red line on the chart, as we speak, with lower gold prices (as shown on the left). My bet is that real yields may rise somewhat, but I think a better bet is to sell gold. Gold has the potential to break above the dotted upward support line from earlier this year and enter the prominent support area of $2,450-$2,375 in early 2025. Edge Capital, LLC founder Gordon disclosed: (Gordon owns the Bitcoin ETF IBIT in his wealth management company Inside Edge Capital, LLC. He personally shorts gold through short futures positions. The chart shows MotiveWave and Optuma.) All expressed Opinions Opinions expressed by CNBC Pro contributors are theirs alone and do not reflect the views of CNBC, NBC UNIVERSAL, its parent company or affiliates, and may have been previously disseminated by them on television, radio, online or other media . The above is subject to our Terms and Conditions and Privacy Policy. This content is for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to purchase any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above may not apply to your particular situation. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. Click here to view the complete disclaimer.
