A Research Institute Has Published Report On The Correlation Between Gold And Bitcoins

Ritika Sharma
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.
  • Gold has a social consensus on its stability and value preservation, mainly due to its use as the state-level reserve hedging asset.
  • Matt Global states that the development of Bitcoins is similar to that of the Gold in the 70s.
  • The primary attributes, financial hedging attributes, extreme event price response, and sentiment index, are going to be the factors to determine the results.

Digital Gold is the alternative name for Bitcoins. This name has given to Bitcoins due to their low-risk and high-return, which is similar to Gold.

Matt Global states that the development of Bitcoins is similar to that of the Gold in the 70s. Does the head of Bitwise Asset Management give the theory valid?

After looking at the historical data, an article explores the similarities and the differences between Gold and the Bitcoins. The primary attributes, financial hedging attributes, extreme event price response, and sentiment index, are going to be the factors to determine the results.

It is hard to deny that Bitcoins have revolutionized the digital currency sector. However, it is quite far from getting the safe-haven status as of Gold. Still, when the economic environment stimulated, Bitcoin short-term hedging attributes. 

The original report can read here. Below you can find its summary.

  • Gold has a social consensus on its stability and value preservation, mainly due to its use as the state-level reserve hedging asset.
  • The analysis of Gold’s safe-haven attributes focuses on the conclusion that the correlation between the price of Gold and inflation is direct. 
  • Bitcoins offer a similar risk-avoidance conclusion based on the statistics. They have a weak and inverse correlation with the mainstream stock market indicators.
  • As for the correlation between Gold and Bitcoins, it is relatively high with a Pearson coefficient of more than 0.75. However, in the case of extreme national risk, Bitcoin is more famous for investment than Gold is.  
  • When compared to hedging tools, the stability of Bitcoins cannot compare to that of Gold. Bitcoins still have a long way to go for gaining a mainstream social value recognition.

As per the disclaimer, the report linked above based on research done on market objective data. The data has scrutinized to give the most accurate results, but a 100% accuracy cannot be guaranteed. It should not use as a reference for personal investments. 

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