Bitcoin fell overnight (12th August), falling 4.4% to nearly $ 11,000 after bears pushed the coin to lows of $ 11,150. Heavy, profit-taking sales from traders are likely to be behind the decline. Gold was also down more than 5% on the day, hitting lows of $ 1,901.
Highest bitcoin / gold correlation
According to Skew Analytics, the monthly correlation rate of Bitcoin and gold is now around 70%. This is a record high, beating the peaks seen in 2018 and May 2019. The increase in the correlation between the two assets reinforces the reputation of Bitcoin as “digital gold” or as a “store of value” as a precious metal, as the analysis company adds.
According to Charles Edward of the Capriole Fund, the correlation is “proof that Bitcoin is digital gold”. He shared the following graphic on Twitter and found that the correlation between Bitcoin and gold has reached new highs whenever the market risk was last highest since 2019. The last correlation rate is almost twice as high as the last ratio. This means that the prices for both the cryptocurrency and the precious metal “move in parallel” more than “50% of the time”.