As economic uncertainty is increasing day by day, a clear correlation between Bitcoin and gold is seen. The data of reliable intelligence firms shows that the Bitcoin-gold correlation has reached new highs.
According to data revealed by The Daily Shot, bitcoin-gold correlation reaches its highest level. The correlation value now stands at 0.6, which is the metric used to indicate a correlation between two assets-gold and Bitcoin.
Bitcoin-Gold Correlation and Economic Instability
The trend is continuously increasing because economic instability has turned investors to seek safe-haven assets. In the financial world, Bitcoin and gold are known as safe-haven assets due to their high potential at the time when fiat become fail. As the economic volatility is surging high, the Bitcoin volatility is decreasing as institutional investors are putting their faith in the world’s top digital asset.
In March, the 60-day Bitcoin-gold correlation touched a new high. That high value has remained persistent to date.
The data from another crypto data tracking firm CoinMetrics also shows that the correlation between gold and Bitcoin has remained high since March. However, the value went down at the beginning of July.
One-month correlation between gold and Bitcoin has hit an all-time high (76.3%) on September 19, analytics firm Skew reports.
Both Skew and CoinMetrics also reveal an increase in a one-year correlation between two assets.
Institutional Interest in Bitcoin
After Coronavirus, the global world has changed drastically due to disruption in every sector. The world economy has suffered the most, while debt has increased many folds. Many central banks have adopted the policy to contain negative financial effects on lower strata of life, but their activities have weakened the respective national fiat currencies.
As a hedge against fiat volatility, gold has performed outstandingly in the pandemic. Gold was trading at $1,477 on March 18, but in August the gold price crossed $2,000. In the past, gold acted as a safe-haven asset in times of certainty, but now, it has got the company of Bitcoin.
In 2020, Bitcoin has got the attention of big players as well as institutional investors or firms. In May, fund manager Paul Tudor Jones claimed it had 2% of its assets in Bitcoin.