Bitcoin Price Correlation With Gold Nearly Doubled in Past 3 Months

The correlation between digital and physical gold has almost doubled in the past three months, fresh data from Bloomberg revealed on August 7.

The statistics reveal that while the correlation between Bitcoin and gold over the past year was at 0.496, in the past three months this has almost doubled to hit 0.837 - where a coefficient of +1 indicates perfect correlation, and -1 complete non-correlation.

58% lockstep since May. Bloomberg notes that over the past year, the correlation between the assets has been random: with the two assets trading inversely 49% of the time, in a correlated downturn 22% of the time and in a correlated uptrend 29% of the time.

Since May 8 of this year, their trading in tandem has surged to 58%. The article notes the caveat that 3 months is a relatively minor data set, as well as the fact that correlation does not imply causation.

Its author argues that stablecoin Tether - rather than purely market forces - has a significant impact on the price of Bitcoin and the liquidity of crypto markets.

Correlation between Bitcoin and gold, YTD and 3 months.

The article notes the adverse impact of escalating trade tensions between the United States and China on the world economy - against which, as investor Tim Draper argued earlier this week, Bitcoin can offer a "Remarkable hedge."

Mounting recognition of Bitcoin as a safe-haven asset is being spurred by the relevance of its non-sovereign characteristics amid an unpredictable geopolitical backdrop.

Jeremy Allaire, CEO of crypto payments firm Circle, has this week said that macroeconomic turmoil is driving the price appreciation of Bitcoin as "a non-sovereign, highly secure mechanism to store value that can exist anywhere the internet exists."

Macro factors - including central banks' dovish policy turn - have also been cited in relation to Bitcoin's bullish price performance by various analysts in recent weeks.