Gold's Surge Hints at Monetary Policy Easing, Boosting Crypto's Prospects
CryptoNewsTerminal Staff13 Sep, 2024
Gold's Surge Hints at Monetary Policy Easing, Boosting Crypto's Prospects
Gold's recent surge, hitting a record high of $2,5645 per ounce on Friday, is a positive sign for the cryptocurrency market, according to ByteTree's CIO, Charlie Morris. He attributes the gold rally to central banks' increased reserve acquisitions, indicating a potential easing of monetary policy in the future. Morris suggests that this monetary easing would create a tailwind for cryptocurrencies, as it typically leads to increased money supply growth. Bitcoin has underperformed gold and the S&P 500 in recent months, but Morris believes it could benefit from this trend reversal. Historically, gold's price has been influenced by inflation-linked U.S. Treasury securities. However, Morris notes that global factors, such as government deficits, are now driving gold's value. This shift suggests that gold's strength is a reflection of global economic recovery and increased stimulus measures. If these trends continue, both gold and cryptocurrencies are expected to perform well in the coming months.
