In recent months, the correlation between the most recognized cryptocurrency and the most famous precious metal is reaching new heights. Coin Metrics analysts say that Bitcoin and Gold they entered the same recovery patterns after the sell-off from March to April.
On March 12, Bitcoin dropped in price to $ 4,800 level. Gold was also boosting, hanging near the $ 1,500 level. According to CoinMetrics charts, Bitcoin and gold hit their lowest points of the year in March 2020.
The biggest settlement points for the global blockade, a new economic slowdown became an unbearable reality.
People were selling assets for cash as they needed to source. Many lifelong hodlers had to spend most of their stored funds on food, medicine, etc. Unexpected isolation even brought tough minds into survival mode as the rising tsunami of unemployment intensified fears.
The COVID-19 pandemic, the EDF quantitative easing program and the disruption of the supply chain drove the stock market crash. Some market analysts had expectations of a lightning-fast rise in the price of Bitcoin. However, the market saw Bitcoin enter correlation with stock market trend and fall into the abyss. Many meme makers made jokes about the famous notion of 'digital gold'. Such a correlation may indicate that there are far more institutional investors in Bitcoin than some have thought.
However, new data from Coin Metrics shows that gold and Bitcoin have been close allies so far for more than three months.
More than that, the correlation rate has steadily increased. Gold is selling for $ 1,728 and Bitcoin is currently hovering at $ 9,600. However, the big sharks on the market like Mike Novogratz they predict a massive capital shift towards the Bitcoin industry.
VanEck investment gurus confirm Gold-Bitcoin's close correlation
According to data of VanEck April, the correlation trend between gold and Bitcoin was moving to 0.47. At the same time, a year-to-date chart shows that the metric was around 0.42 in 2019.
Here, 1 means complete correlation, while -1 means there is no correlation at all. It is worth noting that Bitcoin has never been so close to gold. Since 2012, the correlation index has hovered somewhere near 0.03. This change is a significant achievement for the cryptocurrency industry.
Yesterday, the price of Bitcoin suddenly dropped below $ 10,000 to touch $ 9,300Market experts were surprised to see the mismatch return to the $ 9k range. Proponents expect prices to rise thanks to post-halving effects and the fiduciary crisis. Because the crisis means possibility, traders are drowning in uncertainty. It seems that the basis of long-term success is portfolio diversification and extreme attention to market signs.