Altcoin News: The Correlation Between Bitcoin and Gold Doubled in 3 Months

August 7, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

The correlation between digital and physical gold has grown almost 2 times in the last 3 months, according to new data from Bloomberg.

Over the past year, the correlation of Bitcoin and gold was 0.496, and within 3 months it reached 0.837. In the scale under consideration, a coefficient of +1 corresponds to absolute correlation, and -1 to its complete absence.

According to Bloomberg, the correlation of the two assets varied throughout the year: the inverse correlation was observed 49% of the time, the correlation on the fall — 22%, on the rise — 29%.

Image credit: Bloomberg

The analyst admits that 3 months is a rather short period of time, and the observed dynamics is not yet confirmation of any causal relationship.

At the same time, geopolitical and macroeconomic factors can influence the behavior of both assets. The author notes that 3 years ago, against the backdrop of the Brexit referendum, Bitcoin and gold also began to repeat each other’s movements.

“I’m not convinced that Bitcoin always moves purely through market forces. Like others, I suspect that Tether, a so-called stablecoin with contested legitimacy, plays a large role in the liquidity of crypto markets and affects the price of Bitcoin,” the author writes. “However, the recent movement of gold and Bitcoin doesn’t appear random.”

Author: Marko Vidrih