Bitcoin and gold have decoupled, with their correlation plummeting to near zero. Learn what this shift means for traders and the future of these assets.
In the last year, global markets have surged by 28%, and both Bitcoin and gold have seen notable gains. However, despite their shared upward momentum, these two assets are no longer moving in sync as they once did.
Gold has reached an all-time high, while Bitcoin remains about 6% below its peak. What’s most striking is the significant drop in the correlation between the two. Four years ago, Bitcoin and gold had a correlation value of over 50%, meaning their prices often moved together. Today, that figure has nearly vanished, with a current correlation close to zero.
A closer analysis of the data reveals that Bitcoin’s 90-day correlation with gold now stands at just 0.04, indicating that changes in gold prices have little impact on Bitcoin’s performance. For example, in October 2020, Bitcoin had a 50% correlation to gold’s returns, but now it trades more independently, challenging the old notion that Bitcoin is simply “digital gold.”
To put this into context, the correlation scale ranges from 1 (indicating two assets rise and fall together) to -1 (indicating they move in opposite directions). Bitcoin’s current correlation with gold suggests their prices are barely linked at all.
As Bitcoin and gold continue to follow divergent paths, traders and investors will need to rethink their strategies and recognize the growing independence of these assets.