The inveterate claim of bitcoin being the digital equivalent of gold was strengthened earlier this month. The correlation between the two spiked to a new high since August 2016, when bitcoin was trading at $600 and an ounce of gold was also valued at $1,330, according to the Arcane Research report.

Both assets rallied following the US-led killing of Iranian military commander, Quasem Soleimani.

Notable of this correlation is when the one-year time-frame is looked at. At the close of 2018, the correlation was -0.2, that was during the peak of the crypto-winter. Since then, both gold and bitcoin have been dancing to the same tune.

This is evident by a steady trend of 3 price movements.

In the first instance, both bitcoin and gold saw massive surges on January 3 when the death of Soleimani was made public.

Secondly, they both saw another surge after Iran attacked a US air-base in Iraq, in retaliation. This time round, bitcoin crossed the $8,000 level for the first time since November 2019.

Moreover, as the US President Donald Trump spoke about the de-escalation, the two stores of value started making U-Turns. Bitcoin dropped below $8,000, while Gold also made a reversal from its $1,600 threshold.

Though the correlation between the two seem to be thin, the claim of bitcoin being a safe haven could be fulfilled. However, Arcane stated in their report that this short-term price correlation does not imply long-term causation.

It is important to note that, there is no organic demand for bitcoin from Iran itself, both in product and in sentiment. It can be inferred that, bitcoin’s movement towards safe haven is centered more on market volatility than the market itself.

Bitcoin demand in Iranian rial (IRR)and Google search volume for the term ‘Bitcoin’ has not shown any spike with global spot price. This is an indication that the price surge emanated from investors overseas hedging the uncertainty of the global market, and not Iranians seeking for a safe haven.

Hence, it can be concluded that, bitcoin and gold are only showing correlation as safe-haven investment and not safe-haven assets.