• Recently, there has been an increase in the correlation between Bitcoin’s [BTC] price and precious metals such as gold and silver.
• According to Glassnode, this correlation is likely due to investors appreciating both sound money and mitigating counter-party risks.
• Kaiko reported that BTC’s 30-day rolling correlation with gold has surged since March and currently stands at its highest level in two years.
Bitcoin’s Correlation With Precious Metals
Recently, there has been a noticeable surge in Bitcoin’s [BTC] correlation with precious metals such as gold and silver, according to data from IntoTheBlock. This indicates that the price movements of BTC, gold, and silver have become closely aligned as investors recognize the similarities between these asset classes causing them to move in tandem.
Appreciation for Sound Money
In a report by Glassnode published on 17 April, the on-chain data analytics firm noted that over the past year, the “correlation between the performance of BTC prices, relative to Gold, the traditional sound money safe haven” increased. This suggests that investors are increasingly appreciating sound money and recognizing counter-party risk.
Kaiko Reports Increased Correlation
Cryptocurrency market data provider Kaiko tweeted on 26 April that BTC’s 30-day rolling correlation with gold had surged since March and now stands at 57%, its highest level in almost 2 years. Kaiko also noted that Bitcoin had struggled to entice buyers recently falling to $26000 before oscillating within a narrow range.
BTC Price Movement
At press time Bitcoin was trading hands at $26862.52 and had logged a 30% decline in trading volume over two days ago. The king coin has since traded with $26800-$26900 price marks exhibiting little movement since then.
Conclusion
The increasing correlation between BTC’s price movements with those of gold indicates investors values for sound money while looking for ways to mitigate counter party risk thus driving up demand for both Bitcoin and precious metals alike