Bitrabo Editorial
The correlation between Bitcoin and Gold has been strengthening recently, as indicated by their 60-day correlation showing an upward trend.
Growing Relationship Between Bitcoin and Gold
In a recent publication by X, Kaiko explores the increasing correlation between Bitcoin and Gold. The term “correlation” refers to a measure that tracks how closely linked the prices of two assets are.
A positive correlation value indicates that the assets move in the same direction in response to price changes. On the other hand, a negative correlation value suggests that the assets move in opposite directions in response to price fluctuations.
The extreme positive correlation is denoted by 1, while the extreme negative correlation is represented by -1. A correlation value of 0 signifies no relationship between the assets, indicating they are independent variables.
The chart below illustrates the 60-day correlation trend between Bitcoin and Gold over recent years:
In 2023, the 60-day correlation between Bitcoin and Gold had dipped into negative territory, showing movements in opposite directions. However, in recent months, the correlation has increased and turned positive, though still relatively low with a value below 0.2.
While the correlation has risen, it remains below the high of around 0.5 observed in 2022. Investors should consider correlations when diversifying their portfolios, as highly correlated assets may not offer effective diversification.
Bitcoin’s Current Price
Currently, Bitcoin is trading at approximately $68,700, with a nearly 2% increase in the last 24 hours.