• Bitcoin and gold have the highest correlation in over a year, with a 93% correlation.
• Gold is on the verge of breaking out to an all-time high, nearing $2k an ounce.
• The correlation between BTC and gold increased after the FTX collapse.
The recent correlation between Bitcoin (BTC) and gold has been a topic of discussion among investors and analysts in the crypto space. Data suggests that the correlation between the two assets has been steadily increasing in the past year, and has recently hit a one-year high of 93%. This comes as gold is on the brink of an all-time high, nearing $2k an ounce.
The correlation between BTC and gold has been a long-standing narrative in the Bitcoin ecosystem. Proponents of the asset often refer to it as „digital gold“ due to its fixed supply and high demand. As such, the two assets have often mirrored each other in terms of price movements and sentiment. This has been especially true in the past year, as the two assets have experienced similar price movements and have had a significant correlation.
However, the correlation between the two assets weakened in early 2021 when the FTX collapse occurred. The crypto derivatives exchange had a significant amount of Bitcoin on its balance sheet, but the incident had nothing to do with BTC itself. After the dust settled from the FTX collapse, the correlation between BTC and gold shot up to its highest level in more than a year.
The recent surge in the correlation between the two assets has come as gold is on the verge of breaking out to an all-time high. The precious metal has been trading near the $2k an ounce level for the past few weeks, and analysts predict that it will soon break through this level. This will be a significant milestone for gold, and could potentially create a positive sentiment around BTC as well.
All in all, the recent surge in the correlation between BTC and gold is a positive sign. As gold nears its all-time high and the correlation between the two assets strengthens, it could be a sign that investors are increasingly viewing Bitcoin as a safe-haven asset, like gold. This could be a positive sign for the future of the asset, and could indicate that Bitcoin is on its way to becoming a mainstream asset.
