Bitcoin's Correlation with Gold Hits 6-Year High Amid Fading Tech Link
The correlation between Bitcoin and gold has reached its highest level since the 2020 pandemic, while its relationship with the Nasdaq has weakened significantly. The shift comes as concerns about debt, deficits, and currency debasement return to the spotlight after the latest developments in the US.
According to Grayscale's Head of Research, Zach Pandl, the bitcoin-gold correlation has climbed from near zero at the beginning of the year to over 50%. In contrast, the Nasdaq relationship with Bitcoin has moved in the opposite direction, falling from over 60% to around 30%-33%.
The change started after the US Treasury Department's announcement that it would double the maximum size of liquidity-support buybacks for longer-dated government debt. This move propelled a mid-August rally in Bitcoin and gold, with BTC rising from under $65,000 to over $80,000 and gold going from $4,350/oz to $4,700/oz.
The August rally was a striking example of the opposite, with BTC gaining over 20% in days while US equities struggled. This divergence suggests investors are increasingly valuing Bitcoin for its scarcity and monetary properties rather than simply treating it as a speculative risk asset.