Asia Morning Briefing: Are Crypto Traders Ready for a Gold Market?

Core Insights - Gold has increased nearly 60% year-to-date, significantly outperforming bitcoin, which has only risen 13% [1] - Analysts believe gold is not overpriced despite its rally, with expectations that it will outperform bitcoin in 2025 [1] Market Sentiment - Data indicates that only 34% of crypto traders are in long positions, with just 35% profitable, highlighting a majority in losing short positions [2] - The average daily profit and loss (PnL) for users has dropped to just under $50,000, suggesting consistent misalignment with market trends [2] Trading Community Dynamics - The trading community is described as being caught off guard, exemplified by the significant losses of celebrity trader Machi Big Brother, who saw profits plummet from $43 million to over $13 million [3] - Overleveraged positions in bitcoin are leading to substantial losses, indicating a disconnect between trader conviction and market reality [3] Market Conditions - Glassnode reports a $19 billion deleveraging in bitcoin, marking one of the largest in its history, and characterizes the market as being in a "reset phase" [4] - Funding rates have dropped to levels seen during the 2022 FTX collapse, with negative ETF inflows and long-term holders selling into strength [4] Asset Performance - Gold's rise is attributed to geopolitical tensions, cooling inflation, and expectations of U.S. rate cuts, positioning it as a safe-haven asset [5] - In contrast, the speculative nature of crypto markets, reliant on ETF flows and leverage, has not captured the same positive narrative [5] Current Market Prices - Bitcoin is trading around $108,287, influenced by risk aversion and profit-taking [6] - Ether is priced at $3,891, experiencing a sell-off alongside bitcoin due to weakened speculative demand [6] - Gold is rallying as investors seek safety amid geopolitical tensions and anticipated U.S. rate cuts [6]