Bitcoin-Gold Correlation Hits Six-Year High Amid Bond Market Selloff
The correlation between Bitcoin and gold has reached a nearly six-year high as investors seek refuge in safe-haven assets during times of market stress, according to data from Bitwise. This trend is attributed to rising bond yields and increased purchases of long-dated bonds by Treasury Secretary Scott Bessent.
During the latest bond market selloff, Bitcoin rose 22.4% over a week while gold added about 5%, with stocks falling in value. André Dragosch, director of research for Bitwise in Europe, noted that this correlation is reminiscent of the Covid crisis in 2020 when governments and central banks responded to the crisis with fiscal and monetary stimulus.
The 90-day correlation between Bitcoin and gold reached a level not seen since 2020, implying that headwinds for the US Dollar Index are tailwinds for Bitcoin and gold. Dragosch stated that 'when things get serious and macro forces are strong, investors are discriminating less and less between bitcoin and gold as they navigate rising currency debasement risks.'
Glassnode analysts noted that Bitcoin's 30-day correlation with the S&P 500 fell toward zero during the August rally, but cautioned that sudden decorrelations during sovereign bond selloffs have historically been short-lived.