Gold–Bitcoin correlation at two-year high
Due to high inflation and the collapse of several banks, bitcoin and gold are tracking a similar trend line.
With high inflation and the collapse of several banks, bitcoin and gold are following a similar trend line. Since March, the 30-day correlation between bitcoin and gold has been rising, according to data from analysis platform Kaiko. The correlation between the two assets is at a two-year high.
According to the data, the price movements of both assets are 57 percent in sync, putting them at a two-year high. Correlation is the most commonly used statistical measure for assessing relationships between markets. In investing, market correlation is studied because portfolio construction aims to blend investments with low or negative correlation to reduce volatility.
After several American banks and most recently Credit Suisse collapsed, both bitcoin and gold have surged. At the time of writing, BTC is at $29,365 and gold is just under $2,000 per ounce.
The current price move of Bitcoin (BTC) also echoes the rise in gold prices in the 1970s. Back then, US inflation was also relatively high. If BTC actually follows a similar price path to the metal back then, a $100,000 threshold could be breached within a few years. Of course, the price path and global adoption of cryptocurrencies are essential factors here.
