A Bitcoin analyst has suggested that the significant surge in gold prices last year may have generated a new pool of profits that could potentially flow into Bitcoin, adding to the ongoing discussion about what might drive the next cryptocurrency rally.
PlanB, a prominent analyst who posts on X under the handle @100trillionUSD, noted that gold's market capitalization increased by approximately $10 trillion last year. He expressed that it would not be surprising if a portion of these newly realized profits were "rotated/diversified into bitcoin."
Profit Taking in Gold Puts Bitcoin Back in Focus
Gold's strong performance over the past year has likely resulted in substantial profits for many investors, creating an opportunity to rebalance their portfolios into other assets. In traditional financial markets, it is common practice for investors to trim positions after significant price increases and reallocate those funds into assets with different risk profiles. Bitcoin, which operates 24/7 and has a considerably smaller overall market value than gold, can experience sharp price movements when new demand emerges.
The price appreciation that generates these gains can be significant, even without the use of leverage. For example, in a hypothetical scenario using a gold profit calculator, a $10,000 investment purchased at a price near $4,669 and sold at approximately $7,003 could yield around $5,000 in profit, representing roughly a 50% return, assuming zero fees. Such returns can generate substantial cash that investors may choose to redeploy, particularly those who view gold as a liquid hedge rather than a long-term holding.
The market structure for Bitcoin has also evolved compared to previous market cycles. A greater number of institutional investors now have access to Bitcoin through regulated products and major exchanges, which effectively lowers the operational friction associated with reallocations. While this does not guarantee inflows, it makes the concept of "diversifying into Bitcoin" more feasible than in the past, when custody, compliance, and liquidity presented more significant barriers.
What Rotation Could Mean for a Bitcoin Bull Run
Analysts who monitor cross-asset flows frequently observe shifts in capital after substantial moves in major markets. A transfer of profits from gold into Bitcoin would not need to be exceptionally large to impact its price, given Bitcoin's smaller and more volatile market. Consequently, even modest buying activity can influence the spot market, especially during periods of tightening supply and when sellers become less active.
However, the precise timing of such a rotation remains uncertain. Investors may opt to hold their profits in cash, move into bonds, or diversify their allocations across equities and other alternative investments. Bitcoin also carries drawdown risks that gold typically does not, which can influence the willingness of more conservative holders to rotate capital.
PlanB presented his observation as a possibility rather than a definitive forecast. Nevertheless, the idea underscores how a strong year for gold can shape narratives within the cryptocurrency space, prompting investors to consider whether a portion of those gains should be allocated to a higher-risk asset that also benefits from scarcity principles.
Gold Near Record Levels as Analyst Sees Route Toward $4,700
In related news, an analyst on X has indicated that gold could reach a new all-time high next week, with potential to ascend to $4,700, as current price action remains near recent peaks.
Janey, who posts as @Janey_Analyst, shared a TradingView chart of XAUUSD, suggesting that the current market setup points towards a further upward movement. The chart depicted gold trading at approximately $4,596 based on OANDA data at the time the screenshot was taken.
The one-hour chart analysis reveals gold trading sideways following a rapid ascent. The price is holding above a designated support zone while encountering resistance near a specific band. Janey's projected trajectory outlines a potential dip followed by a rebound, which would first retest the resistance level before aiming higher towards the $4,700 mark. Traders often view such price levels as potential scenarios rather than guaranteed outcomes.