Ether-Bitcoin Dynamics and Supply-Side Impact on Gold-Silver

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Ether-Bitcoin Dynamics and Supply-Side Impact on Gold-Silver Prices

By Erik Norland, Senior Economist, CME Group

Ether-Bitcoin: Moving in the Same Direction

  • Bitcoin and ether have become more positively correlated.
  • Both fell in 2018, drifted in 2019/2020 before rallying in 2020/2021.
  • Bitcoin supply limited to 21 million coins, ether supply is unlimited.
  • The ratio of ether’s volatility relative to bitcoin’s has fallen since 2018.
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Gold, Silver Rally Coincides with Fall in Output

  • Gold, silver mining output has been falling since 2016.
  • Pandemic led to mine closures in 2020, exacerbating declining supply.
  • Falling output, more severe for silver, helped to rally prices of both metals.
  • Gold output influences gold and silver prices more than silver output.
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