Bitcoin, Gold price correlation increased during Covid-19: Jay Hao, CEO, OKEx

  • As per Jay Hao, CEO of OKEx, a drop in the US dollar (USD) and the Bitcoin (BTC) surge almost coincided recently.
  • The correlation between Bitcoin and USD as well as that between gold and USD declined, while the correlation between Bitcoin and gold increased
  • Majority of USDT flowing into digital asset exchanges was used to acquire more Bitcoin 

OKEx is one of the world’s largest cryptocurrency derivative exchanges, and recently, Jay Hao, the CEO made an observation that has generated interest amongst crypto enthusiasts all over the world. As per Hao, a drop in the US dollar and the Bitcoin surge almost coincided in times of the Covid-19 pandemic.

There clearly has been some downward trend along with some unprecedented quantitative easing policies, points Hao. These policies, in turn, have resulted in many US dollars being sold, which primarily have been responsible for diminishing its price index.

USD vs Crytpo vs Gold

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A per latest statistics, the US dollar index has dropped below 93 – which is its lowest point in 2020 and also a two-year low, added the OKEx CEO.

Jay Hao was of the view that the global hedge funds are pretty confident about a further dip in the value of USD. He felt that the cumulative bearish bet on USD increased by approximately $5.3 billion in the current week to reach $24.5 billion.

Tether USDT

Hao inferred that the correlation between Bitcoin and USD as well as that between gold and USD declined, while the correlation between Bitcoin and gold increased. Corroborating the finding, he added how prices of gold and Bitcoin have surged, in contrast to a declining US dollar index.

Betting on Bitcoin

There’s no denying that with the passage of time, Bitcoin is slowly yet steadily emerging as an alternative investment target on a global scale, besides gold. Moreover, Hao also stated that there is a good chance when gold rises to ‘people’s psychological highs’, many of the USDs would begin to be pushed into Bitcoin and other digital currency markets.

The OKEx CEO further substantiated with additional data that the supply of Tether’s USDT stablecoin has been witnessing a steady uptick, particularly in July 2020, when “the upward curve became steeper.” The upward momentum of gold too, fell simultaneously, suggesting that more USD may be flowing into the crypto market as compared to earlier times.

USDT tether

He also pointed out that after these USDs were converted to USDT, some of them were welcomed in the world of digital asset exchanges. The inflow of USDT into crypto exchanges increased by 282,539,130 USDT to 725,857.429 USDT on July 27, 2020 – which is unmissably the largest increase in one day or 24 hours since the past 143 days.

OKEx in India

Hao’s optimism about cryptocurrencies is also evident in the fact that OKEx recently launched its new platform in India, and the platform’s first day of trading was described by the CEO as a ‘huge success’. This peer-to-peer (P2P) trading platform aims to enable users to buy crypto assets with Indian money. Glad about appreciation and positive response from users pouring in, Hao stated in a report by Cryptonews that India was a very ‘tech-savvy’ country, and the Indian government was more receptive about cryptocurrencies than ever before.

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Piyasi Mitra
Piyasi Mitra is a journalist, features writer and copy editor who has worked with The Times of India and the ABP Group, and is currently exploring content creation in the digital space.

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