Home » Bitcoin’s correlation with gold is rising and here’s what that means – Bank of America

Bitcoin’s correlation with gold is rising and here’s what that means – Bank of America

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(Kitoko News) According to Bank of America (BofA), the correlation between gold and the world’s largest cryptocurrency is growing as bitcoin holds above $19,000. as a safe haven.

When analyzing market activity, BofA noted that the relationship between Bitcoin and gold is noteworthy.

“Positive correlation with SPX/QQQ slows down, correlation with XAU rises sharply [gold] BofA’s cryptocurrency and digital asset strategists Arkesh Shah and Andrew Moss said, “Investors see Bitcoin as a relatively safe haven as macro uncertainty persists and market bottoms are not in sight. indicates a possibility.

The correlation between Bitcoin and gold is viewed as an inflation hedge/store of value, the strategist explained.

From June 2021 to February 2022, the correlation remained near zero. It turned negative in March 2022. Shah and Moss wrote in a report released on Friday that the correlation turned positive in September and continued to rise.

Overall, market activity in the crypto space has shown “limited directional confidence as investors sit on the sidelines and wait for macro/investor capitulation,” according to the report.

The market value of the top 100 digital assets has fallen 3% over the past two weeks and is down 60% year-to-date.

According to strategists, over the past four weeks, bitcoin has seen exchange outflows of $2.6 billion, which is 3.6 times the exchanges’ inflows over the same period. “Forex outflows in 3 of the last 4 weeks (BTC +2% in the last 4 weeks) show that investors are continuing to HODL rather than sell hard,” said Shah and Moss. rice field.

Last week alone, bitcoin exchange outflows totaled $1.4 billion, the largest since mid-June. And that means more bearish sentiment in the short term. Shah and Moss wrote, “Weakness, supply shortages and massive and sustained outflows into whale stocks point to limited near-term selling pressure.”

Bitcoin It last traded at $19,502, up 1.5% on the day but down 72% from its all-time high of $69,000 in November 2021.


Disclaimer: The views expressed in this article are those of the author and may not reflect the views of the author Kikko Metals Co., Ltd. The author has made every effort to ensure the accuracy of the information provided. However, neither Kitco Metals Inc. nor the authors can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation of an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the authors of this article accept no liability for loss and/or damage resulting from the use of this publication.

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