Bitcoin Ties the Knot with Gold: $40 Trillion Debt Load Sparks Correlation Surge
Bitcoin's correlation with gold has reached its highest level since 2020, according to Bitwise. The firm's data shows that Bitcoin's 90-day correlation with gold is above 0.5 for only the second time on record.
The last time this happened was during the 2020 stimulus wave, when fiscal and monetary policies were implemented in response to the COVID-19 crisis. Since then, investors have been looking at both assets as a way to hedge against currency debasement risks.
Bitwise chief investment officer Matt Hougan notes that if the US grows out of its $40 trillion debt burden, AI stocks will be the way to go. However, if inflation is used to pay off the debt, Bitcoin will be the preferred asset.
Hougan suggests that investors own both assets in either scenario, as they are mutually beneficial and can provide protection against rising currency debasement risks.