(Kitco News) - Gold hasn’t had much competition as an alternative asset for general investors looking to diversify; however, that could change as one analyst believes it's only a matter of time before spot Bitcoin exchange-traded funds enter the marketplace in 2024.
In an interview with Kitco News, Joy Yang, Global Head of Index Product Management at MarketVector Indexes, said the approval of a Bitcoin ETF could keep gold prices rangebound near $2,000 an ounce through most of the year as the cryptocurrency becomes an attractive alternative asset.
“A Bitcoin ETF will be the shiny new thing in the market, and a lot of investors like shiny new things,” she said. “There are some big players in the market, so there is a very good chance that Bitcoin will be a popular alternative asset as part of a diversified portfolio, and it could come at gold’s expense.”
Yang’s comments come as Bitcoin proponents wait for the Securities and Exchange Commission to approve several ETF applications, with a decision coming as early as Wednesday. Eric Balchunas, an analyst at Bloomberg Intelligence, sees a 95% chance that Bitcoin ETFs will be approved in January.
It is also expected that the SEC will approve more than one ETF so no one firm has a first-mover advantage.
Yang said that although there is a chance that a Bitcoin ETF is not approved this week, the SEC is running out of excuses to delay their decision. She said that it is only a matter of time before the ETFs are approved.
The gold market saw similar competition with Bitcoin in 2021 when the cryptocurrency rallied to a record high around $69,000 per token. According to some analysts, Bitcoin’s rally weighed on gold prices, impacting the market by nearly 3%.
Although renewed interest in cryptocurrencies is expected to impact the gold market, Yang said that she doesn’t expect gold prices to drop below $2,000 an ounce this year.
“There’s enough market uncertainty and geopolitical risk that the gains gold made in 2023 will stay in 2024,” she said.
Yang said that she expects gold prices to trade in a range between $2,000 and $2,100 an ounce through 2024. However, she added that aggressive Fed rate cuts could cause gold to shine despite Bitcoin’s long shadow.
Neils Christensen
Neils Christensen has a diploma in journalism from Lethbridge College and has more than a decade of reporting experience working for news organizations throughout Canada. His experiences include covering territorial and federal politics in Nunavut, Canada. He has worked exclusively within the financial sector since 2007, when he started with the Canadian Economic Press. Neils can be contacted at: 1 866 925 4826 ext. 1526 nchristensen at kitco.com @KitcoNewsNOW
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