Bitcoin’s Correlation with Gold Has Reached Extremely High Levels: What Does This Mean?

Bitcoin’s (BTC) correlation with gold has reached one of its highest levels in recent years, while its relationship with technology stocks has weakened significantly.

According to data cited in The Kobeissi Letter, based on an analysis by Bitwise Asset Management using Bloomberg data, Bitcoin’s 90-day moving average correlation with gold has risen to approximately +0.50. This ratio marks one of the highest levels seen since the pandemic in 2020 and is more than double the level at the beginning of the year.

In contrast, Bitcoin’s 90-day correlation with the Nasdaq 100 index has fallen to approximately +0.30, reaching its lowest level in the past year. The data suggests that Bitcoin has recently moved away from technology stocks and begun to exhibit price behavior more similar to gold.

The Kobeissi Letter noted that the strengthening correlation between Bitcoin and gold accelerated after the US Treasury Department announced on August 19 that it would increase the limit for long-term bond repurchases from a minimum of $2 billion to $4 billion per transaction.

According to the analysis, investors are increasingly viewing Bitcoin and gold as similar hedging assets due to concerns about rising public debt and currency depreciation. The fact that Bitcoin’s correlation with Nasdaq is declining while its correlation with gold is rising also indicates a strengthening tendency in the market to price Bitcoin not just as a risky technology asset, but as an alternative store of value.

*This is not investment advice.