The Bitcoin secure haven narrative could also be again as knowledge reveals the cryptocurrency’s correlation with Gold has surged in current months.
Bitcoin Correlation To Gold Has Increased During The Past Year
According to the most recent weekly report from Glassnode, the correlation between the 2 belongings remained excessive throughout the current US banking disaster. The “BTC correlation to Gold” signifies how carefully Bitcoin is following the actions happening within the worth of 1 troy ounce of Gold.
When the worth of this metric is unfavorable, it means BTC is presently responding to actions within the worth of Gold by touring in the other way. On the opposite hand, optimistic values of the indicator indicate the 2 belongings are shifting in an identical trajectory proper now.
Naturally, when the correlation is zero, it suggests there isn’t a sample concerning how the cryptocurrency and Gold are shifting relative to one another.
Now, here’s a chart that reveals the pattern within the 30-day Bitcoin correlation to Gold, in addition to in its 90-day and 365-day variations, over the previous couple of years:
Looks like the worth of the metric has been fairly excessive in current days | Source: Glassnode's The Week Onchain - Week 16, 2023
The above chart makes use of the image “XAU,” however observe that this time period refers to 1 troy ounce of Gold right here and never the Philadelphia Gold and Silver Index.
As displayed within the graph, the Bitcoin correlation to Gold didn’t present a lot sturdy optimistic correlation throughout the bull run in 2021, because the metric had assumed unfavorable values for an honest chunk of the interval.
Correlation additionally remained weak within the first few months of 2022, however issues began to vary because the bear market took maintain. In the final twelve months, the indicator has principally registered excessive optimistic values, suggesting that the 2 belongings have change into strongly tied throughout this era.
The FTX crash supplied one exception, nonetheless, because the indicator’s worth had turned deep crimson across the time it came about. Nonetheless, with the rally this 12 months, the belongings rapidly grew to become strongly correlated once more, as all three MAs (30-day, 90-day and 365-day) obtained optimistic values.
Gold has historically been thought of a secure haven asset, whereas shares and BTC have usually been thought of dangerous investments. With the correlation between Bitcoin and Gold turning into excessive just lately, plainly the Digital Gold narrative could also be making a comeback.
Interestingly, the correlation additionally remained excessive throughout the US banking disaster some time in the past, when establishments like Silicon Valley Bank (SVB) collapsed and shook the market. This could also be additional proof of BTC being checked out in a greater gentle just lately.
“This does suggest that an appreciation for both sound money and the realities of counter-party risk are increasingly front of mind for investors,” notes Glassnode.
BTC Price
At the time of writing, Bitcoin is buying and selling round $29,500, up 1% within the final week.
BTC appears to have plunged throughout the previous day | Source: BTCUSD on TradingView
Featured picture from Aleksi Räisä on Unsplash.com, charts from TradingView.com, Glassnode.com
