Experts caution against overlooking Bitcoin’s long-term potential despite its current underperformance compared to precious metals.

Bitcoin and precious metals have been at the center of a fierce debate lately, with Bitcoin struggling to break the $90,000 mark while gold and silver are on a relentless rally, setting new records. The comparison between digital gold and actual gold has sparked discussions about their performance and the long-term outlook for both assets.

Experts have been analyzing Bitcoin’s performance in the context of previous cycles to gauge its current situation. According to The DeFi Report, despite Bitcoin being down 29% 110 days after reaching its all-time high, it seems to be holding up relatively well compared to previous cycles. In the 2021 cycle, Bitcoin was down 41% at the same point, while in the 2017 cycle, it had dropped by 55%. This suggests that Bitcoin may not be performing as poorly as it appears at first glance.

Eric Balchunas, a senior ETF analyst at Bloomberg, highlighted the short-sightedness of some investors when comparing Bitcoin to precious metals. He pointed out that since 2022, Bitcoin has outperformed gold, silver, and the QQQ ETF by a significant margin. Balchunas emphasized that the institutionalization narrative around Bitcoin has been priced in quickly, leading to its exceptional performance compared to other assets.

Nic Puckrin, the cofounder of Coin Bureau, also weighed in on the precious metals trade, noting that the momentum behind gold and silver has been building for months. He suggested that retail investors may soon join the rally, further driving up prices. Puckrin believes that the current macroeconomic environment favors gold as a safe-haven asset, indicating that the rally in precious metals could continue for an extended period.

Overall, the comparison between Bitcoin and precious metals highlights the complexities of the investment landscape. While Bitcoin may be facing challenges in the short term, its performance in previous cycles and its resilience in the face of market fluctuations suggest that it could still have room for growth. On the other hand, the strong performance of gold and silver underscores the appeal of traditional safe-haven assets in times of uncertainty. Investors will need to carefully consider the dynamics of both markets to make informed decisions about their investment strategies.