The flagship cryptocurrency’s 60-day correlation with gold has hit a new all-time high, at a time in which BTC has been managing to remain above the $10,000 mark.
According to data from Coin Metrics, BTC’s 60-day correlation with gold hit 0.5, a new all-time high, as a climb that started in July when bitcoin’s price was still consolidating around the $0,000 mark has kept on rising.
To some investors, the price action between bitcoin and hold has been closely aligned over the last few months partly because of the U.S. Dollar Index (DXY). According to MarketWatch the fiat currency’s value has been dropping steadily since hitting 102 after the March market crash.
The correlation between bitcoin and gold was even higher on Bloomberg’s September Crypto Market Outlook, as it stood at 0.8. The value was that high, however, as Bloomberg calculated the data interrelation on a per-month basis.
It’s worth pointing out that on Coin Metrics’ platforms, bitcoin’s 90, 180, and 360-day correlation with gold is not at a new all-time high, and dropped since August. Nevertheless, the flagship cryptocurrency is being seen by some as a store of value that can protect their portfolios against an economic crisis.
The dollar’s weakness has been benefiting both gold and BTC as investors who fear inflation are turning towards safer assets. Bloomberg’s September Crypto Market Outlook suggests BTC’s price could keep rising for the same reasons that helped gold.
Bloomberg researcher Mike McGlone wrote:
The primary attributes that underpin the price of gold and Bitcoin — limited supply, store of value, diversifier and quasi-currency — will persist in a world of unprecedented quantitative easing, in our view.
The unprecedented quantitative easing McGlone is referring to is the current tactic central banks are using to stimulate the economy in the wake of the COVID-19 pandemic’s effects on it. Quantitative easing has helped the Federal Reserve’s balance sheet surge to over $7 trillion this year.
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