Is Bitcoin a Digital Gold? Kaiko Data Indicate Otherwise
Bitcoin has often been projected as the digital equivalent of gold as it acts as a store of value and inflation hedge quite similar to the functions associated with gold. However, if you ask any Bitcoin proponent about the parallels, most would say Bitcoin would rather displace gold and act as an independent asset class rather than digital gold. The recent data from Kaiko paints a similar picture as Bitcoin’s correlation with gold has reached a new 3-year low moving into negative territory.
A negative correlation suggests the two asset classes would not follow the price pattern for each other while a positive correlation indicates the asset class would follow each other’s price movement. The negative correlation suggests Bitcoin and Gold are least co-related as an asset class.
Bitcoin Has a Positive Correlation with S&P 500 Index
Bitcoin continues to move away from Gold but has a positive correlation with the popular stock index S&P 500 and Nasdaq. Before the bull run began towards the end of November last year, BTC had a close correlation with the stock market but the correlation almost vanished as the cryptocurrency started to climb during the bull run reaching a new ATH of $64,863 recorded in April this year.
Bitcoin price took a massive hit last month starting in the second week of May, which saw its price fall to a new 3-month low just above $30k. The price of BTC and several other altcoins saw a slump of over 50%, a day that saw nearly $500 billion wiped out of the crypto market. The positive correlation between the stock market could be attributed to the recent slump in the market and the correlation would decline once Bitcoin is back to its early price highs.
- Just-In: Changpeng “CZ” Zhao Counters Peter Schiff, Says “Tokenizing Gold Is Not On-Chain Gold”
- $240 Million Hacked Crypto Exchange WazirX Reopens Deposits But Faces Community Backlash
- Expert Flags Pi Network Team as Source of Selling Pressure After Reported 1.2M PI Dump
- Ripple’s Chris Larsen Expands XRP Realized Profit to $764M Amid Evernorth Deal
- Just In: Hyperliquid Strategies Eyes $1B Capital Raise, Plans HYPE Token Accumulation
- XRP Price Classical Pattern Points to a Rebound as XRPR ETF Hits $100M Milestone
- Chainlink Price Eyes $27 Rebound as Whales Accumulate 54M LINK
- Pi Network Price Wedge Signals a Rebound as Key Upgrades Raise Utility Hopes
- Solana Price Eyes $240 Recovery as Gemini Launches SOL-Reward Credit Card
- XRP Price Prediction Amid Evernorth’s $1B XRP Treasury Plan – Can XRP Hit $5?
- Ethereum Price Targets $8K Amid John Bollinger’s ‘W’ Bottom Signal and VanEck Staked ETF Filing
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
