Tactical rotation from gold to Bitcoin
The guest argued that investors should tactically rotate capital from gold into Bitcoin when the Bitcoin-to-gold ratio declines into the mid-to-low teens.
The argument
The guest explained that the ratio recently fell from the high 30s to 13. He also noted that the launch of spot ETFs has democratized the asset class, reducing the risk of massive drawdowns previously caused by highly concentrated ownership among a few large families.
The thesis, stress-tested
✓ What validates it
- ✓The Bitcoin-to-gold ratio reversing upward from the low teens
▸ Risks discussed
- ▸Historically short data set for the Bitcoin-to-gold ratio (only five years)
- ▸Potential for financial decay in ETFs that roll futures contracts over long periods
Hear it yourself
"The the thinking around that is the Bitcoin to gold ratio was 38 in the in the high thirties, and it recently hit 13. Now there's only five years of data, but historically, when that ratio gets into the mid to low teens, you wanna you wanna just sell some gold and buy some Bitcoin."
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