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Coinometrics: bitcoin price continues to correlate with gold

Coinometrics: bitcoin price continues to correlate with gold

CoinMetrics notes a high correlation between the price of gold and bitcoin in recent months. At the same time, according to Van Eyck, the correlation between assets has increased since March.

In its latest report, the analytical company Coinmatrics claims that the correlation between the price movement of gold and bitcoin is quite high, and this trend has been maintained over the past few months.

As you can see from the chart below, during the markets ‘ fall in mid-March, bitcoin lost more than half of its value and fell into the $4,000 range, while gold was trading at less than $1,500 per ounce.

Yesterday, the bitcoin exchange rate exceeded $10,000 amid protests in the US, and gold is now trading above $1,700 per ounce.

In February and March, bitcoin and gold prices reached their lowest levels in a year, with bitcoin losing more than half of its value and gold falling by several hundred dollars. However, in the next two months, assets grew in parallel with each other – BTC reached the level of $9,000, and gold-above $1,700. V

Data published in April by VanEck confirms the findings of Coinmatrics. The firm reported that the correlation between bitcoin and gold has become the norm since late February, when markets began to fall due to the pandemic. From the middle to the end of March, the correlation of BTC with gold rose to 0.47.

At the end of April, the correlation indicator between bitcoin and gold increased to 0.49. In addition, according to VanEck, the average annual correlation between the two assets was 0.42. This suggests that the movement of the price of bitcoin and gold in many ways occurred in parallel during the year.

However, if you look at the relationship between bitcoin and gold from the beginning of 2012 to March 2020, there is almost no correlation between the price movements of these assets – the indicator is at the level of 0.03. This is probably due to the large increase in the price of BTC over the years.

In April, Bank of America said it expected the price of gold to rise to $3,000 in the next year or two. Supporters of bitcoin are sure that “digital gold” will become more expensive during the crisis.