Is Bitcoin Following an Explosive Gold Fractal from the 1970s?
Bitcoin price could potentially follow a fractal from gold in the 1970s – the last time US inflation got out of control.
What followed was a more than 700% rally in the precious metal. Will the same happen in digital gold?
Bitcoin follows the price fractal of 1970s gold
Over the past week, both Bitcoin and gold have rallied in the wake of widespread bank runs and failures. Gold is up about 10% on the year, while BTC is close to a 70% return.
With bank stocks plunging and the top cryptocurrency by market capitalization surging, BTC priced in banks is producing some of the most shocking and awe-inspiring price charts you can imagine.
That shock and awe could continue if a fractal BTC follow from 1970s gold continues to unfold. In the 1970s, the US inflation rate reached over 10%, and double digits were not uncommon through the early 80s.
During the worst, gold rose more than 750% from $100 to $850 per troy ounce of the precious metal. Now the same price fractal is potentially back in Bitcoin, as is skyrocketing inflation.
Bitcoin today versus 1970s gold | BTCUSD on TradingView.com
The fastest horse in the race against inflation
During the 2020 bull run, billionaire investor and philanthropist Paul Tudor Jones famously said that Bitcoin could be the fastest horse in the race against inflation, citing gold from the 1970s.
Inflation had first reached double digits in 1974, just three years after US President Richard Nixon announced that the US would no longer be convertible from dollars to gold at a fixed price of $35 an ounce.
Gold became parabolic, and only experienced a decline in 1974 when inflation overheated. After a two-year correction, gold spent the next few years increasing by more than 750%.
Bitcoin price also corrected hard when inflation first reared its head, but after two years is starting to show resilience. In the future, it could prove to be the digital equivalent of gold in the 1970s, helping investors beat inflation or a banking crisis.
In the price fractal above, gold completed a wave 5 after an extended flat correction, according to the Elliott Wave Principle. In commodity markets, wave 5 tends to be extended. With BTC being classified by the SEC and CFTC as a commodity, could the crypto-asset work the same way?
If BTCUSD were to follow the same path with a 750% return from recent lows, it would eventually take Bitcoin to over $132,000 per coin. Could this be what’s in store for the first ever cryptocurrency?
In the Elliott Wave principle, commodity wave 5 is the longest and strongest.
With #Bitcoin labeled as a commodity by the SEC and CFTC, will it exhibit such commodity-like market behavior? Here is a comparison with #Gold in the 1970s. $BTC vs $XAU pic.twitter.com/I6ifTOtz8V
— Tony “The Bull” (@tonythebullBTC) March 20, 2023
