The bitcoin rate is increasingly similar to the rate of gold. Tim Culpan of Bloomberg states this on 7 August. Between last year and now, the correlation between the price of bitcoin and the price of gold was 0.496. If you only look at the past three months, that figure has almost doubled to 0.837.
How should you view these numbers? A figure of -1 means negative correlation. Or in other words: bitcoin increases, then gold decreases. A figure of 1 means perfect correlation, both rates then move in the same way. Bitcoin has moved almost in the same pattern as gold in recent months (or the other way around, just the way you want to see it).
58 percent of movements are the same since May 2019
In addition to the correlation, Culpan also examines which movements of the course are the same. From August 2018 until now, both rates are moving in 49 percent in the opposite direction. But that changes if you only look at the past three months. Since May 8, the bitcoin rate has been moving with gold in 58 percent of the cases.
According to Culpan, there is not necessarily a question of cause and effect. In addition, according to him, the stablecoin Tether has a lot of influence on the price movements of bitcoin.
Global economy causes bitcoin rise
But Culpan also thinks that developments in the global economy are affecting the course of bitcoin: “The uncertainty is back. The tensions between China and America have escalated. This week, the value of the yuan fell sharply, much to the dismay of President Donald Trump. There is growing evidence that investors – true or not – are increasingly seeing bitcoin as a resort in turbulent times. “
Many share the view of Culpan. And so does race optimist Tim Draper. He sees that stock indexes in America are falling, while bitcoin is rising. According to him, bitcoin is therefore a remarkable “hedge”:
Nasdaq down 3.4% Dow down 2.9%. Bitcoin up 3.2%. Bitcoin may be a remarkable hedge. #bitcoin
– Tim Draper (@TimDraper) August 6, 2019