As Bitcoin’s knack to follow the direction of US stocks neck-to-neck has reduced in recent times, crypto experts are instead focusing with renewed vigor to the link between Bitcoin and gold (Bitcoin gold correlation) that has suddenly grown stronger than it’s been in over a year.
The intermingled paths of both assets are dividing from that followed by stock prices, which have gone down steeply in 2022. However, the association is still only moderately strong, and no one can say for sure if BTC and gold will continue to move in tandem after all.
Bitcoin gold correlation is growing stronger
As Clara Medalie from the Kaiko crypto research group puts it: “We could be seeing a slight decoupling of crypto and equity markets, which is reflected in BTC’s rising correlation with gold”. Notably, Bitcoin has been trading above and around $20,000 in the first week of October with an estimated 3% gain in the same timeframe, while gold has been up by about the same percentage by trading around $1,700.
The correlation between the two assets hit above 0.3 last week, which is the highest seen in over a year. Since the end of last year, the correlation between gold and bitcoin has oscillated between 0.2 and -0.2.
It’s to be noted that negative values signify weak correlations, whereas readings of 0.3 and 0.5 suggest slightly stronge and moderately strong correlations, respectively.