• Bitcoin and gold have had a 93% correlation in the past year and have mirrored each other’s movements.
• The correlation between Bitcoin and gold has shot up to a one-year high of 93% as gold approaches its all time high.
• This correlation can be attributed to the narrative that Bitcoin is digital gold and the similar fundamentals of supply and demand for both assets.
The past year has seen a significant correlation between Bitcoin and gold, with both assets mirroring each other’s movements. Despite the correlation, Bitcoin has been much more volatile than gold, as demonstrated in the trading view graph depicting the correlation. This correlation has only increased over time, with Bitcoin and gold currently having a 93% correlation.
The increase in the correlation can be attributed to the narrative that Bitcoin is digital gold. Both assets have similar fundamentals of supply and demand, and gold’s recent surge to an all time high of nearly $2,000 an ounce has only served to boost the correlation further. This correlation has been further strengthened by the fact that the FTX collapse, which had nothing to do with Bitcoin, had a temporary effect on the correlation.
As Bitcoin and gold continue to rise, it is likely that the correlation between the two assets will remain strong. This is due to the fact that both assets are seen as safe havens and a hedge against inflation. Moreover, gold’s increasing popularity has only served to increase the correlation between the two assets.
Overall, the correlation between Bitcoin and gold has been steadily increasing over the past year, with the correlation reaching a one-year high of 93%. This is largely due to the similarities between the two assets and the narrative that Bitcoin is digital gold. As gold continues to approach its all-time high and Bitcoin continues to gain mainstream attention, it is likely that the correlation will remain strong.