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Bitcoin’s correlation with gold hit highest level in over a year

Bitcoin’s correlation with gold. A review by a Bitcoin mixer: mixer.money
Bitcoin’s correlation with gold hit highest level in over a year

Bitcoin correlates more with gold than with stocks amid the economic crisis, experts say. Cryptocurrency enthusiasts argue that the benefits of digital gold match the pros of real assets in the form of precious metals when it comes to safe haven and storing one’s own savings.

So far, the correlation between bitcoin and gold remains moderate, and the question of their synchronized movement is still undetermined.

“We could be seeing a slight decoupling of crypto and equity markets, which is reflected in BTC’s rising correlation with gold,” said Clara Medalie, head of research at crypto research group Kaiko.

Bitcoin recently traded just above $20,000, up nearly 3 percent over the past seven days, while gold changed hands at $1,700, also up 3 percent over the same period.

Crypto Research group Kaiko website

According to Kaiko, the correlation coefficient between the two assets exceeded 0.3 last week, the highest in a year. Overall, the index has fluctuated between positive and negative values since late last year.

A value of 0.3 usually indicates a slightly positive correlation and 0.5 means the correlation is moderately strong, while negative numbers indicate weak correlations.

Of course, bitcoin’s decline is much steeper than that of gold. This is due to the unstable political and economic situation in the world. But it also caused the first cryptocurrency to rise, as investors looked for solid ground immune to broader economic volatility this year. Bitcoin advocates have long argued that the asset can serve as a financial hedge in times of economic turmoil, comparing it to gold, which investors have historically valued for its ability to hold value.

“At this stage, investors are no longer X-raying the advantages of one hedge against inflation against another, but rather, they just want a better alternative to keep their funds at a time when fiat has proven to be more unstable,” Alexander Meurer, co-founder of blockchain-based fitness application Fitburn, said.

In general, bitcoin has shown little volatility in price lately, unlike stocks. It is this circumstance that has attracted attention to it once again.

Ignoring cryptocurrency is no longer possible

Most states are in a hurry to introduce legislative regulation of cryptocurrency. For example, the European Union (EU) has agreed on the full legal text of its landmark law, known as the Markets in Crypto-Assets (MiCA) Regulation, along with an additional law revealing the identity of those who make crypto payments.

MiCA introduces the first-ever licensing regime for crypto wallets and exchanges to operate across the block and imposes reserve requirements on stable coins that are designed to prevent Terra-style crashes. A separate funds transfer law requires wallet providers to verify the identity of their customers to reduce money laundering.

The text of the law must be formally agreed upon by lawmakers in the European Parliament and is expected to be published in the EU’s official journal early next year before coming into force in 2024.

Russia already has a bill on digital currencies. The US is still undecided, but the SEC is taking active steps, taking major exchanges to court and fining celebrities for advertising cryptocurrencies.


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