If every company in the S&P 500 puts 10% of their cash into Bitcoin, the cryptocurrency then becomes a trillion dollar market, said Gary Wagner, editor of TheGoldForecast.com. While gold is climbing slow and steadily as opposed to Bitcoin’s sudden burst into new all-time highs, similar to the “tortoise and the hare”, Bitcoin has higher upside potential in the short-term, with an upside target of $61,000, and a downside correction floor of $39,000, Wagner said.
Bitcoin hit a new all-time high on Tuesday. Why is gold still lagging behind? That's the question I'll be addressing with Gary Wagner editor of the gold forecast.com. Gary, it's good to speak with you, especially during such volatile times for the markets by markets. I really just mean the Bitcoin market.
Everything else is just kind of just stalling and trudging along. So let's start with Bitcoin and all rephrase the question I posited earlier to the viewers. Why has Bitcoin outperformed when gold is still flat? Well, I, the one thing that I would, first of all, pleasure to be here, but the one thing that I would say is that you've got a very, very popular advocate with about 4 million or 45 million, excuse me, Twitter viewers, and that's Elon Musk.
So when he speaks, he carries a big stick. And I think it was his comments that really triggered this incredible move in Bitcoin yesterday, where it opened in about 3,800 and closed that approximately 4,500, right in that area. Today, it went much higher. Of course, moving up to a high of about 48,000.
Excuse me, not a hundred. That's how quick it moves, but 48,000. And then it's backed off a little bit, but still at 47,546 as we speak, I asked this to another guest before you, but I'd like to get your take as well. Now Elon Musk with Tesla, the company has issued a statement saying that they're updating their investment policy and now they could buy both Bitcoin and gold.
They've already purchased $1.5 billion of Bitcoin, but they're now the open to buying gold bullion or ETF, any gold products as part of their investment plan. I wonder why gold prices didn't move on that announcement like Bitcoin. I mean, they have moved, uh, they had a really nice state yesterday. Not that you know, when you're comparing anything to the kind of move you're seeing in Bitcoin, which is in the double digits and the mid double digit, you know, you're looking at a 20, 30, 40% moves on a given day.
It's very hard for anything to, uh, To compete with that. You're you're, you're you're right. It is. It is quite desensitizing. When you compare Gold's movement to, uh, to, uh, to that of Bitcoins, you, you become desensitized to, to a single digit move, even though it is. Perhaps significant for the gold market.
Let's talk about Bitcoin first and then we'll move on to gold. So let's look at the charts now you've Petter chart for us at $46,000. Is that, uh, has that surpassed its fair value for the, for the, uh, for the time being Gary? Well, you know, that's an interesting question because unlike other hard assets, The value of Bitcoin is 100% controlled by demand.
And that's demand whether there's buyers or sellers in the market. The intrinsic value of Bitcoin is nebulous at best. So if you continue to have this kind of excitement, you could continue to see it rise. I am honestly surprised at the momentum. It has picked up over the last couple of days. If you look at this chart that we have up on screen.
It is a daily candlestick chart and you can see the move yesterday as an extremely long red candle. And that's this one right here and we've never seen Bitcoin really take off like that. The one warning I would have. Is that whenever you tend to get a parabolic rise and over the last three trading days, it's certainly met that criteria.
You tend to get a parabolic fall when there's profit-taking. Yeah, so it's going to move up quickly, but it might move down quickly as well. Well, even if it corrects to the downside, like you said, Gary is a long-term trend still up. If you just take a look at that chart you're showing, um, if you apply a Fibonacci sequence, for example, What is the long-term target?
Is that up from here, flat or down? Well, the long term target would be a one to one and I'll have to compress that. That would take that to about $61,000 per Bitcoin, but we do have resistance. And this is what's called a Fibonacci harmonics where you see the white lines in the yellow line. And these two being very close together.
Our harmonics is when we do a Fibonacci retracement, which we have done the retracement starts at the lows of March. When it was trading at $4,200 for Bitcoin to where it's at now, which is $47,000. So that's a 10 X return in under a year. Whenever you get something like that. The first thing you want to look at is at 0.6, one 8%.
Um, extension. And then that lines up, of course, with the height that came in today at around 48,000, if it trades and tracks beyond that, as I said, it's pretty much clear sailing because we're an unchartered territory. So about 60,000. If it retraces the numbers that Joseph has put together. And he's the one who helped me prepare them chart.
Joseph Joseph. He was just sung for those, for those that don't know my son, Joseph, who does a daily Bitcoin report. Correct. But the retracement, which still. Keep it above 38,038, nine nine seven is the number I come up with and that's the 0.7, 8% retracement from the March lows to the highs that we achieved, traders would still want.
And investors alike would still be wondering whether now is the correct entry point, because the danger here is you don't want to get in when it's at a high, but you also don't want to miss. Another move up because you know, people get upset at either of those outcomes. What does your chart tell you?
Gary, you've got a clear and defined breakout. It's broke above the all-time record high, gone to a new all-time record high for a single Bitcoin. And when that happens, I tend to be. In on the camp that says you buy the breakouts. So you can look for a dip, but if the market's going to move parabolic and continue to move to the upside, if it breaks above 48,805, and that's today's high.
Then it's, you're going to get a, a burst coming in, whether it is the futures contracts, where they're hunting for stops. Yeah. Those trying to short the market here, or whether it's additional interests coming into the market. But you've got an advocate like Elon Musk. Who, when did he buy $1.5 billion worth of Bitcoin from the company?
Yeah, that's a lot. And on CNBC yesterday, they talked about if every of the large companies in the S and P. Put 10% of their free capital into Bitcoin. We're talking about a trillion dollars moving into that market and that would certainly take it much higher. And that's the other thing you have to realize is the market cap of Bitcoin is still dwarfed when you compare it to the market cap of gold, the ETF GLD, for example, There is so much money in that, that it is much more difficult for single players to move a market, but there is room to move higher.
Where could it go? I just have to go back to a Fibonacci sension and say that if it, if we get an all in out crazy bull market, About 61,000 per coin, if it retraces, I think it should go back to about 39,000. Okay. So Gary w one thing that I noticed was that a lot of people were concerned of a pullback at first of all, the $20,000 level, which was the then high at 20, in 2017.
And then when it reached resistance at $40,000, people were speculating that it could. Fall back down and continue. It's downward descent like we saw in 2017, but it didn't do that. Can you identify a fundamental reason as to why this time is different from 2017? Uh, because you've got big players in the market, especially Elon Musk, uh, I think that his single tweets that he came out with.
Over the last couple of days has had a profound influence on the price of a single Bitcoin. And the fact that he allocated $1.5 billion, billion, something million, that's a lot of money, a lot of capital to put into that market. It has to be supportive of at least price stability. And that means it could have burger to go.
When you look at the retracement today from its high at around 48,805 to its current pricing at 47,420, that's a very slight retracement from the kind of view we've witnessed now, when it does retrace and I'm not going to even fathom where that will occur. It should come down with the same, uh, momentum that moved it higher.
That's the only caveat I have to this. All right. So we've talked about Bitcoin. Let's talk about gold. Now. Can we pull up a gold chart, Gary, and take a look at recent price action. Absolutely. Let me get that up for us. Um, you know, today we've had, now this is the third day, as you can see where we've got a green candle now, before we even get.
So I'm just going to comment. That looks like a much less exciting chart than that of Bitcoin. And I can understand why a lot of gold investors are jumping the bandwagon now. Correct, but you still have to realize that it has come up from lows of around 1780, just below 1800 per ounce and is now at 1850 and we're still flirting with it under the all-time record highs.
So I'm pegging resistance in two places at about 1850 in that. Coincidentally comes in as the high of the day. And then again at 1875 and with one final one where I pegging major resistance at around 1960, we had a double top that occurred, uh, first in November, right here. And then again at the beginning of this year, 2021, and you're right.
It is not, it does not have the kind of momentum, but what is really interesting to me is when you look at this, or if I switch over to a spot book chart, because it. Gives you a little bit more of an indication. You really had the likelihood that we were going to see a death cross between the 50 and 200 day moving averages.
And that of course is the purest form of that. Either a desk, death cross, or a golden cross is the 50 against the 200. And the one thing that we noticed within silver for example, is we had a golden cross pack in the middle of last month, but we'll move back to. The futures chart. This is basis, most active April, and I think it has some room to the upside, but we really need to see it break and close above 1850 pounds.
And then we've got a couple of levels above that, but that's the one thing we want to see now, Gary, I talked to a guest about the macro factors behind golden. He stated that the dollar as you and I have talked about several times, a dollar is one of the important factors now. He said that the dollar has already peaked during the Trump presidency.
Do you agree with disagree with that statement? I would agree. I say there's a 90% probability that what he is stating will come out to be a fact. And the reason is the tremendous amount of fiscal stimulus that we, uh, allotted for last year, $4 trillion by the treasury department. And the interesting thing is that is true.
Uh, debt that's added to our budget deficit. Now what happened last week, and this week is that the Senate was able to pass their budget resolution. With only 50 members of the Senate voting gay and 50 voting day. And the tie-breaking vote coming from the vice president. And that kind of is paving the way for them to push through a large fiscal stimulus package.
And get it through without any Republican support. The other thing is the new secretary of our treasury, which Janet Yellen is really an advocate of doing it big and robust in terms of the amount of fiscal stimulus, which makes it more likely that we'll see, uh, a fiscal stimulus bill of $1.9 trillion get passed either early next week.
Or sometime this week. Yeah, here's a counter-argument Gary is that we've already seen fiscal stimulus in 2020, whatever happens in 2021. We've already seen it. It's not a new occurrence anymore. And so maybe the gold market has already digested any future occurrence of fiscal stimulus. And so even if they pass a bill, it's not going to move the market.
What do you think? Well, I think it was only partially baked into current pricing and to me, the. Run that we've seen in gold over the last three trading days. And that is these three candles right here. Come in from approximately, uh, 1800 just below 1800 and moving it back up to 1850. That, I mean, once you look at a Bitcoin chart, it's hard to look at these and, and relate to the fact that we've seen higher pricing, but if you pass as a, I'm going to round it up to a $2 trillion fiscal stimulus package that's increasing in already swelling budget deficit to unheard of numbers, record numbers in terms of our national debt.
And of course, as you increase the debt of the United States, it has to, has to take the dollar lower intrinsically. The more money you print, the more money you add to the system. You can't get away from the clear cut facts that that has to devalue those, those shares in this case, those dollars. And so I think that we will see the dollar come down and I think that that will be one of the larger underlying tones to why gold moves to higher ground.
Okay. Uh, we'll, we'll save the inflation. Talk for another interview. Cause I know we can go on 10 minutes for that. So we'll follow up again in, uh, in, uh, the week after. And we'll talk about that in more detail. Uh, so final question for you, Gary, before we wrap up Bitcoin or gold, which has more upside in the near term.
Based on your child based on my charts. And based on the action we've seen, you've got to say that Bitcoin has more upside potential. It's kind of like the tortoise and the Hare. I think that we're going to see an incredible move in Bitcoin, whether it's up or down, it's going to be a big price swing, which one's the tourist, one's the hair.
Huh? Well, gold is definitely the turtle in this case. Well, flow. We all know how that story ends, right? Correct. So, so you're, you're saying down the line gold will outperform Bitcoin. No, what I'm saying, you said gold will hold games. Uh, much easier than the game seen in Bitcoin. We've seen Bitcoin run up to 20,000 and within a couple of weeks road to 5,000, we have never seen gold run to a record top of, uh, uh, 2088.
And then three weeks later, two weeks later come down by, uh, 75%. So I think it's a steadier, a safer play. I think that there is upside potential gold and Bitcoin is going to have a tenfold volatility compared to gold. And so I, it's not that I don't think the Bitcoin, I think that Bitcoin will outperform it as long as it's in rally mode unquestionably, but I think that gold will perform eloquently.
And compare it to Bitcoin, much more slow. Okay. Perfect. Well, let's, uh, tune in and we'll stay tuned to the market action and we'll follow up against it. Thank you very much again for coming on today. Great to be here. Thank you, David. And thank you for watching Kichler news. I'm David Lynn. .