The Golden Rotation!

Dear all,

There’s the old saying: “When the shoeshine boy starts giving stock tips, it’s time to sell.”

For me, the modern version might be: when my Uber driver tells me he’s bullish on gold, it’s perhaps a sign that we’re close to a local top in the gold price

The other comment I keep hearing is:

“How come BTC isn’t moving if it’s meant to be digital gold?”

Well, maybe these two things together could actually be the trigger for a bullish run in BTC.

The reality is that spec money eventually takes profits and looks for somewhere new to park capital — and where better than the next version of gold? Digital gold that, at least on a relative basis, still looks cheap.

The chart below is the one I’d use to support this speculation. A simple regression of BTC versus gold implied volatility shows just how cheap BTC options currently are relative to gold. To me, this highlights the lack of activity and interest in BTC compared to gold. In that context, BTC’s failure to participate in the rally may not reflect bearish fundamentals, but rather a temporary absence of positioning and engagement.

One thing we’ve often observed in crypto is the so-called “great rotation”: during a BTC bull run, investors start taking profits and reallocating that capital into cheaper, up-and-coming altcoins — triggering what we call alt-season.

I can’t help but wonder whether we might see a similar dynamic play out here: profits being taken in gold and redeployed into underperforming BTC and broader crypto markets.

Maybe — the crypto season is finally here.

Happy Hunting..

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