In a shifting global financial landscape marked by rising expectations of interest rate cuts, both gold and Bitcoin—often dubbed "digital gold"—are regaining momentum. Gold has recently reclaimed the $2,400 level, while Bitcoin has surged past $70,000, edging close to its all-time high. Amid this rally, experts suggest that while both assets serve as stores of value, Bitcoin’s growth potential significantly outpaces gold over the next 12 months. With strategic investment approaches like dollar-cost averaging (DCA), even new investors can position themselves for substantial long-term returns.
Global Rate Cut Expectations Fuel Asset Demand
Central banks, including the Bank of Canada and the European Central Bank, have begun easing monetary policy, reinforcing market expectations that the U.S. Federal Reserve will follow suit in 2025. As bond yields and the U.S. dollar weaken, capital is flowing into alternative assets. Bitcoin has responded strongly, climbing back above $71,000—just shy of its March peak of $73,777. Similarly, gold futures have retested $2,400 per ounce. Although recent labor data briefly pressured commodities, analysts believe this is a temporary pause before another wave of institutional inflows.
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Why Bitcoin’s Growth Potential Exceeds Gold
According to Calvin Choi, co-founder of the Hong Kong Algorithmic Trading Research Center, Bitcoin and gold share core traits as non-correlated stores of value. However, their market dynamics differ significantly. Gold’s market cap stands at approximately $16 trillion, while Bitcoin’s remains around $1.4 trillion—less than 10% of gold’s size. This disparity creates asymmetric upside potential.
“Over the past decade, gold has delivered single-digit annual returns on average,” Choi explains. “Bitcoin, by contrast, has historically returned around 100% per year. The scalability of gains is simply not comparable.”
Given its smaller base and growing adoption, Bitcoin is better positioned for exponential growth during the next bull cycle.
Forecast: Bitcoin Could Hit $140K by Mid-2025
Choi forecasts that Bitcoin could reach $140,000 between the second and third quarters of 2025—an increase of nearly 100% from current levels. Two primary catalysts underpin this bullish outlook:
- The halving effect
- Institutional demand via spot ETFs
These forces are converging to create a powerful upward momentum unmatched in traditional markets.
Catalyst #1: Post-Halving Bull Runs Are Historically Inevitable
Bitcoin underwent its fourth halving in April 2024, cutting block rewards from 6.25 to 3.125 BTC. This built-in scarcity mechanism has historically triggered significant price appreciation. In each of the three previous cycles, Bitcoin entered a 12- to 18-month bull market following the halving event.
While the asset is now more mature and liquid, Choi remains confident in strong post-halving performance: “Even conservatively, we’re looking at another doubling in price. The supply shock still matters—even at today’s market cap.”
Catalyst #2: Institutional Capital Is Just Beginning to Flow
The approval of spot Bitcoin ETFs in the U.S. in late 2023 marked a turning point. Since then, Bitcoin has risen from around $26,000, driven largely by institutional inflows. Yet Choi emphasizes that we’re still in the early stages.
“To date, only about $10 billion has flowed into spot ETFs,” he notes. “Many major funds are still waiting for regulatory approval to enter. There’s a line forming at the door.”
With pension funds, endowments, and asset managers preparing to allocate capital, the next phase of demand could dwarf earlier waves.
Frequently Asked Questions (FAQ)
Q: Is Bitcoin really comparable to gold?
A: Yes—in function. Both are decentralized stores of value with limited supply. But Bitcoin offers superior portability, divisibility, and growth potential due to its digital nature and smaller market size.
Q: Why is the halving important?
A: The halving reduces new supply entering the market every four years. Historically, reduced issuance coincides with rising prices as demand outpaces constrained supply.
Q: Are spot Bitcoin ETFs safe for retail investors?
A: Yes. Spot ETFs hold actual Bitcoin and are regulated, offering a secure way to gain exposure without managing private keys or using crypto exchanges directly.
Smart Strategy: Use Dollar-Cost Averaging (DCA)
For most investors, timing the market is a losing game. Choi advocates for dollar-cost averaging—investing a fixed amount at regular intervals (e.g., monthly or weekly). This method smooths out volatility and eliminates emotional decision-making.
“Historically, no matter when you started DCA’ing into Bitcoin—even at previous highs—you would have been profitable,” Choi says. “The key is believing in long-term appreciation, not obsessing over short-term fluctuations.”
He recommends continuing DCA until either:
- Bitcoin reaches $100,000
- Or mid-2025 approaches
At that point, investors should reassess and consider profit-taking strategies as the market may be nearing saturation.
Hong Kong’s Regulated Crypto Landscape Expands
Hong Kong’s virtual asset regulatory framework reached a milestone in June 2024 with the end of the licensing transition period. Now, only licensed or “deemed licensed” platforms can operate legally within the region.
Currently, only two platforms—OSL and HashKey—are fully licensed. However, 11 others are on the Securities and Futures Commission’s (SFC) “deemed licensed” list, allowing them to continue operations under supervision while their applications are processed. These platforms must comply strictly with regulations or risk removal.
Alternative Investment Paths: ETFs and Futures
For investors seeking exposure through traditional channels, several options exist:
- Spot Bitcoin ETFs: Track the real-time price of Bitcoin with minimal tracking error. Ideal for long-term holders.
- Futures-based ETFs: Use derivatives contracts that may deviate from spot prices due to contango or backwardation. Often carry higher fees and rollover risks.
- CME Bitcoin Futures: Accessible via brokerage accounts; suitable for active traders comfortable with leverage.
While futures offer amplified returns (and risks), spot products provide cleaner exposure.
Frequently Asked Questions (FAQ)
Q: What’s the difference between spot and futures ETFs?
A: Spot ETFs hold actual Bitcoin and reflect its true market price. Futures ETFs use contracts that expire and must be rolled over—this can lead to price divergence and compounding costs.
Q: Should I buy Bitcoin directly or through an ETF?
A: Direct ownership gives full control but requires secure storage. ETFs offer convenience and regulatory protection but come with management fees.
Q: Are OTC crypto transactions safe?
A: Over-the-counter (OTC) trades via ATMs or local shops lack oversight and often have wider spreads. Until Hong Kong finalizes OTC licensing rules, investors should exercise caution.
Diversified Options for Gold Investors
For those preferring traditional safe havens, gold offers multiple avenues:
- Physical gold (coins, bars): Tangible ownership but requires secure storage.
- Paper gold: Offered by banks; easy access but no physical redemption rights.
- Gold ETFs: Tradeable on exchanges; high liquidity; some allow physical redemption.
- Gold futures & mining stocks: Higher risk/reward profiles suited for aggressive investors.
Despite its stability, gold lacks the explosive upside seen in digital assets.
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