BITCOIN’S CORRELATION WITH GOLD HITS A SIX-YEAR HIGH
Bitwise says Bitcoin’s correlation with gold has risen to its highest level in six years, while its correlation with equities has fallen to a one-year low. This is notable because BTC has historically been priced largely as a risk asset, often moving alongside technology stocks.
André Dragosch, head of research at Bitwise Europe, said the last time BTC and gold reached a similar correlation was in 2020, during repeated fiscal and monetary stimulus following the COVID-19 shock.
The broader macro backdrop is important. Bitwise argues that major US government fiscal and financial actions are affecting expectations around the purchasing power of the USD, pushing capital toward scarce or harder-to-dilute assets.
The report highlighted the US Treasury more than doubling the size of government debt buyback operations last month. During the same week, US government debt surpassed 40T USD for the first time. Bitwise views these developments as factors weakening confidence in the USD and supporting demand for both gold and Bitcoin.
Interestingly, Bitcoin and gold do not necessarily need to compete as monetary hedges. Bitwise says investors are increasingly holding both.
If this trend continues, Bitcoin’s role within portfolios could change meaningfully. During its first 15 years, BTC was largely valued as a high-volatility growth asset. The next 15 years could look different if its relationship with gold strengthens while its correlation with equities continues to weaken.
Correlation, however, does not mean the two assets will always move in the same direction. It simply measures how similarly they move over a given period. Monetary policy, liquidity, risk appetite and ETF flows can still cause BTC and gold to diverge.
Recent price action has added to the attention. Bitcoin gained nearly 6% over 24 hours and briefly approached 81,438 USD this week.
(DYOR). $BTC $PAXG $XAUT
Bitwise says Bitcoin’s correlation with gold has risen to its highest level in six years, while its correlation with equities has fallen to a one-year low. This is notable because BTC has historically been priced largely as a risk asset, often moving alongside technology stocks.
André Dragosch, head of research at Bitwise Europe, said the last time BTC and gold reached a similar correlation was in 2020, during repeated fiscal and monetary stimulus following the COVID-19 shock.
The broader macro backdrop is important. Bitwise argues that major US government fiscal and financial actions are affecting expectations around the purchasing power of the USD, pushing capital toward scarce or harder-to-dilute assets.
The report highlighted the US Treasury more than doubling the size of government debt buyback operations last month. During the same week, US government debt surpassed 40T USD for the first time. Bitwise views these developments as factors weakening confidence in the USD and supporting demand for both gold and Bitcoin.
Interestingly, Bitcoin and gold do not necessarily need to compete as monetary hedges. Bitwise says investors are increasingly holding both.
If this trend continues, Bitcoin’s role within portfolios could change meaningfully. During its first 15 years, BTC was largely valued as a high-volatility growth asset. The next 15 years could look different if its relationship with gold strengthens while its correlation with equities continues to weaken.
Correlation, however, does not mean the two assets will always move in the same direction. It simply measures how similarly they move over a given period. Monetary policy, liquidity, risk appetite and ETF flows can still cause BTC and gold to diverge.
Recent price action has added to the attention. Bitcoin gained nearly 6% over 24 hours and briefly approached 81,438 USD this week.
(DYOR). $BTC $PAXG $XAUT
