Bitcoin-Gold Correlation Tops 50% as Debasement Trade Revives
The correlation between Bitcoin and gold has surpassed 50%, signaling that investors are turning to safe-haven assets as they worry about the value of traditional currencies. This is in stark contrast to its link with the Nasdaq 100, which has dropped to a two-year low at around 33%.
The $40 trillion in US federal debt and rising long-term yields have revived the 'debasement trade', where investors seek out assets that will hold their value as inflation rises. Bitcoin's rally has also sent miner stocks soaring, with Canaan up as much as 67%.
In addition to this, there have been significant inflows into Bitcoin and Ethereum ETFs, with both logging nine consecutive days of investment. This is in line with the trend of institutional investors entering the market, as they look for ways to diversify their portfolios.