Bitcoin’s narrative as ‘digital gold’ is now being questioned as its price movements are seen to be more like high-risk assets than safe assets, according to a new report by Grayscale.
At the time of writing, Bitcoin’s price is at $69,082, up 0.03% since it opened early Wednesday in Asian trading.
The study found that Bitcoin’s short-term price movements are no longer in line with gold or other precious metals, despite significant increases in gold and silver prices.
On the other hand, Bitcoin has shown a strong correlation with technology stocks, particularly the software sector, since early 2024.
Selling pressure in the software sector driven by concerns that artificial intelligence (AI) could disrupt or replace many existing services has also had a direct impact on Bitcoin.
This shows that the crypto asset is now more sensitive to stock market sentiment and growth assets.
Grayscale also explained that this change is driven by the participation of institutional investors, the existence of Bitcoin ETFs, and deeper integration with the traditional financial system.
As a result, Bitcoin is now trading more like a technology stock than a hedge fund.
While Bitcoin has fallen about 50% from its high of over $126,000 in October, Grayscale insists that this is not a failure, but rather part of the asset’s evolution.
In the long term, Bitcoin still has the potential to be a store of value as the global economy becomes more digital. But in the near term, a recovery in Bitcoin’s price will depend on new capital inflows, whether through ETFs or a return to retail investor interest.
