The correlation of the reigning cryptocurrency with gold has reached its highest level in over a year. As analysts explain, Bitcoin's tendency to move in tandem with US stocks is slowly diminishing. As such, analysts have begun to focus on the connection between gold and Bitcoin, which has just hit its annual high recently.
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In this way, both assets are moving away from stock price trends, which have fallen dramatically this year. This supports the arguments of Bitcoin defenders, who argue that it is “digital gold” and that it offers the same advantages as real gold as a safe haven. However, according to analysts, this correlation is still weak, which leaves open the question of whether Bitcoin and gold will continue to move in sync in the future, since it is possible that this correlation will change over time considering Bitcoin's still premature situation.
The head of research at the Kaiko cryptocurrency research group argues that “it is quite possible that Bitcoin and the stock market are moving away from each other in their correlation, giving way to the new Gold-BTC correlation.” Different Kaiko investigations show interesting data in which it can be seen that Bitcoin reaches the value of 0,3, the highest value in an entire year. In addition, if Bitcoin manages to reach the value of 0,5 we could be talking about a Bitcoin-Gold correlation rated as “moderately strong.”
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When carrying out this analysis and comparison, it must of course be taken into account that Bitcoin has fallen more sharply than gold this year. Both the crisis in Russia and Ukraine and other related factors and others from the market itself have led the crypto sector to a complicated situation in recent months. However, after this, investors have been looking for solid ground immune to the great volatility of the market. One of the last relevant points to take into account at this point has been the problems of the British Pound and the subsequent bet on Bitcoin by British investors looking to secure their funds.
Bitcoin supporters continue to argue that this asset can serve as a financial hedge in times of economic turmoil, even buying it with gold, an asset historically appreciated by all types of investors for its high capacity to maintain value.
Finally, the co-founder of a popular blockchain app explains how “at this stage, investors are no longer looking at the advantages of assets that can provide coverage against inflation but are instead looking for a good alternative to hold their funds at a time when fiat currency has proven to be more unstable.”
