Analysts were keeping eyes on correlation between Bitcoin (BTC) and US stocks for quite long as it remained in tandem. Looking at the current trends, the relation seems to become old talk as the new relation is emerging within space—between bitcoin and gold.
Many find the connection between digital gold and the most precious metal on the planet quite intriguing. The instances of bitcoin price moving away from US stocks and closely following gold took place in almost similar timeframes. Many bitcoin supporters, after the instance, seem to claim the top cryptocurrency as good investments as in gold itself.
However, the relation between both top class assets is not as good as it should be to make a sure bet. Their correlation has barely some strength with a possibility to raise the question. The skepticism remains as it is if both bitcoin and gold will be on the similar path in upcoming time.
Head Research at Kaiko, a known crypto research group, Clara Medalie said there are chances of disengagement between both crypto and equity markets. This, according to Medalie, could lead to the growing correlation between bitcoin and gold.
As per Kaiko, the 30-day correlation between the assets remained more than 0.3 during last week. The figure is highest within a year where crypto seems to maintain distance from stocks. For comparison, last year the 30-day correlation between gold and bitcoin remained within the range of positive and negative 0.2.
For context, the readings generally follow ‘bigger the number, more the correlation.’ Here 0.3 implied as a somewhat positive correlation and more than this like 0.5 would mean moderately strong. While the negative numbers meant to show the weak correlations between assets.
Medalie said this year bitcoin has taken a more steep fall in comparison to gold. Many instances like the Russia-Ukraine war and other global macroeconomic situations together resulted in triggering massive sell-off in the crypto market.
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