ank of America strategists are interpreting recent developments surrounding Bitcoin [BTC] in relation to gold in a bullish manner. Bloomberg reported that at the time of publication, the 40-day correlation between Bitcoin and gold was 0.50. This number was zero in August.
Bitcoin and gold correlation
Bank of America strategists saw a stall in the connection of Bitcoin with the S&P 500 and Nasdaq 100 while the correlation between Bitcoin and gold has been rising. The current values were 0.69 and 0.72, respectively.
As per the strategists, “A decelerating positive correlation with SPX/QQQ and a rapidly rising correlation with XAU indicate that investors may view Bitcoin as a relatively safe haven as macro uncertainty continues and a market bottom remains to be seen.”
Why is this metric favorable for Bitcoin, then? During economic volatility, people swarm to withhold their money in one asset. Real estate or gold is typically the preferred asset for most investors. Gold is now a feasible alternative due to the real estate market's inflation. This is where its strong ties to Bitcoin come into play. Investors are likely to consider the leading cryptocurrency to be an alternate investment.
Recent statements by Mike Novogratz, CEO of Galaxy Digital, align with the strategists' predictions. Bitcoin is the "canary in the coal mine," according to Novogratz, who spoke on October 20 at the C4K Investors Conference.
Correlation at yearly high
The link between Bitcoin and gold was at a yearly high, according to a report by Kaiko Research earlier this month. This was based on research the company did on macro trends. the strengthening of the United States The rise in correlation was attributed, among other things, to the dollar's relative strength versus other fiat currencies like the pound and the euro as well as the US Federal Reserve's ongoing interest rate increases.
Additionally, according to data from CoinMarketCap, King coin is presently selling at $19,183, an increase of 1.20% from October 21. With a $28.5 billion 24-hour trading volume, its market cap was $368 billion.