Gold and Silver Near All-Time Highs, While BTC Price Drops Below $108K

Key Takeaways

• Gold is up $35, and silver is up over 70 cents, while BTC price shows less volatility.
• Meanwhile, Bitcoin dipped below $108K.
• If Bitcoin is digital gold, why aren’t investors flocking to it?

September is a notoriously bad month for crypto, so it should come as no surprise that a glance at the price chart today looks like a battlefield.

Yet, with gold and silver at near all-time highs and Bitcoin touted as “digital gold,” why is the BTC price bleeding as well? Shouldn’t investors be pouring into Bitcoin as a haven asset?

Investors Flock to Gold and Silver

Gold and silver are both approaching record highs, with gold trading just below $3,480 per ounce and silver over $40.50, as of the time of writing. Meanwhile, BTC price dipped below $108,000. What gives?

It was enough to get everyone’s favorite goldbug and Bitcoin critic, Peter Schiff, posting again about how a precious metals breakout is “very bearish for Bitcoin.”

So what’s behind the current flows? Despite what Schiff says, the story is more nuanced than metal maximalists might claim.

Macro Uncertainty: The Main Driver

The main theme behind crypto’s crazy prices is macroeconomic uncertainty. The world’s attention is fixated on the U.S. Federal Reserve and its next policy steps, as inflation remains stubbornly high, and the latest core CPI print held firm above 3%.

There is also growing anticipation that the Fed will cut rates this month, as persistent price pressures leave the central bank little room to act quickly. This means capital is gravitating toward established safe havens such as gold and silver.

Over the last month, gold has climbed over 3%, almost 40% higher than a year ago, while silver is up more than 8% in a single month and 41.7% year-on-year.

Analysts at Goldman Sachs recently reiterated their $3,700 price target for gold, citing continued global demand and monetary uncertainty as tailwinds, while silver’s rally is fueled by industrial demand and the fact that silver often outperforms gold during inflationary upswings.

BTC Price: What’s Happening?

After hitting an all-time high of around $124,500 in mid-August, the BTC price has since retreated sharply. At the time of writing on September 1, BTC is trading under $108,000, thanks to multiple factors, from macro jitters and crowded long positions to the self-fulfilling prophecy of September as a red month for Bitcoin.

Yet the picture is not entirely bleak. Despite record Bitcoin ETF outflows in August, institutional inflows remain strong over longer time frames. According to ecoinometrics, after nearly two weeks of outflows, inflows finally returned to Bitcoin ETFs last week:

In August, the Ark 21Shares and BlackRock’s IBIT ETFs led inflows, while Fidelity and VanEck funds also added to their holdings, offsetting some of the volatility caused by Bitcoin whale dumping and retail investors taking profits.

The Road Ahead: BTC Price vs. Gold

What are the implications of the divergence between precious metals and digital assets? For proponents of the digital gold thesis, it’s a stark reminder that despite years of convergence, gold and Bitcoin are not identical as “risk-off” assets.

In moments of macro vulnerability, traditional safe havens like gold and silver tend to benefit more, especially in times of sticky inflation and macro cross-winds. Until clarity emerges from the FOMC’s next statement, price action is likely to stay choppy.

Gold and silver’s journey toward all-time highs highlights how quickly market psychology can turn when global uncertainty runs high. Bitcoin, for now, is stuck around $108,000, yet ETF inflows and long-term adoption are laying the groundwork for future rebounds.

Investors should keep in mind that both precious metals and digital assets serve as hedges and tend to shine under different macro conditions. The Fed’s next announcement will tell whether its gold and silver or BTC price that will benefit.