The situation is changing for Bitcoin and gold. Long perceived as uncorrelated safe haven values, these two assets now seem to dance to the same rhythm. According to the latest data, their correlation is intensifying, suggesting a new dynamic between the queen of cryptos and the precious metal.
A strengthened correlation between Bitcoin and gold
Analysts at Kaiko, a crypto market data platform, have noted the upward trend in the correlation between Bitcoin and gold prices in recent months. Over a 60-day period, this indicator is currently on an upward slope.
Although moderate at 0.2 for the hourfar from the peak at 0.5 reached in 2022, this positive correlation contrasts with the opposite dynamic observed at the end of 2023. At the time, Bitcoin and gold were moving in opposite directions, displaying a negative correlation.
A new paradigm for investors
If this price convergence were to strengthen, this would limit the benefits of diversification combining the two assets. Indeed, highly correlated values tend to mimic their respective performances.
Portfolios including both Bitcoin and gold could then take the same directions. A risk for investors seeking to offset the losses of one asset with the gains of the other.
Bitcoin is currently trading around $68,700, up 2% over 24 hours. A performance which could be less and less offset by gold if their rapprochement is confirmed.
For the moment, the correlation levels still allow us to consider Bitcoin/gold diversification. But this upward trend could call this asset into question. Investors will therefore need to carefully monitor the evolution of this metric. Too strong an increase would force them to review their allocations to optimize their returns.
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