Will BTC Mimic Gold’s 2004 Price Surge? Analyst Weighs In

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A recent perspective on Bitcoin has not too long ago surfaced courtesy of outstanding crypto fanatic and YouTuber Lark Davis. Davis affords an attention-grabbing parallel between Bitcoin’s potential destiny and gold’s historic efficiency, particularly spotlighting the transformative yr of 2004 for the latter.

Reflecting on gold’s journey in the early 2000s, a interval marked by the introduction of a gold Trade Traded Fund (ETF), Lark Davis means that Bitcoin could also be on the point of an identical breakout. Whereas it is a daring declare, its rationale, centered on the anticipated launch of a Bitcoin spot exchange-traded fund (ETF), warrants a more in-depth look.

Gold’s 2004 Surge: A Prelude To Bitcoin’s Future?

2004 was transformative for gold, with its value trajectory reflecting a notable paradigm shift. The catalyst for this variation was the launch of the primary gold ETF – SPDR Gold Shares (NYSE: GLD) by State Avenue Company.

A chart shared by Davis vividly encapsulates this: the worth of gold started its ascent from a modest $400 per ounce in direction of the tip of 2004 and reached a pinnacle of $1,939 by 2011.

A chart displaying gold’s spike following its ETF launch in 2004. | Supply: Lark Davis

Though a decline to $1,184 adopted this meteoric rise, the general pattern showcased the profound influence of ETFs on asset costs. If historical past had been to function a information, Davis’s analogy suggests Bitcoin would possibly observe an identical path.

A possible Bitcoin spot ETF might usher in a flurry of latest investments, altering the market’s provide and demand dynamics.

As Davis confirmed from the gold instance, introducing such an ETF for Bitcoin might probably entice between $20 billion and $30 billion. Assuming as we speak’s costs, this may be equal to newcomers snapping up roughly half of the out there Bitcoin on exchanges.

‘Provide And Demand Don’t Lie’

Whereas Davis’s projection is rooted in previous developments, it’s essential to know the broader dynamics at play. His assertion that “provide and demand don’t lie” underlines the elemental financial precept that when demand exceeds provide, costs usually rise.

The launch of a Bitcoin ETF would invariably enhance demand by providing a extra accessible and controlled means for buyers to realize publicity to Bitcoin with out proudly owning the underlying asset immediately. This surge in demand and Bitcoin’s capped provide would possibly push prices higher, simply because it did for gold in 2004.

Nonetheless, as with all monetary forecasts, there’s a level of hypothesis concerned. Whereas the parallel between gold’s 2004 trajectory and Bitcoin’s potential future is compelling, solely time will reveal the precise course of occasions.

Regardless of this forecast, Bitcoin has seen a slight dip over the previous 24 hours, with a present market price of $25,867, on the time of writing.

Bitcoin (BTC) value is shifting sideways on the 4-hour chart. Supply: BTC/USDT on TradingView.com

Featured picture from iStock, Chart from TradingView

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