Bitcoin correlation trends: linking with gold, taking distance from alts

13 Jul, 2019
by Alberto Arnaldo
Bitcoin
Bitcoin correlation trends: linking with gold, taking distance from alts

The latest report from cryptocurrency news platform Longhash sheds some light into the latest changes in Bitcoin correlations.

Even though in historical terms Bitcoin and gold have followed quite different paths, with significant correlation periods being rather rare, that tendency appears to be changing.

The analysis is focused on data for the period comprehended between April 1 and July 10 of 2019, which coincided with a rise in gold triggered by uncertainty with regards to monetary and trade policies.

Meanwhile correlation coefficients for Bitcoin and leading altcoins Ethereum, Litecoin and Bitcoin Cash dwindled from above the 0.9 to 0.8 range down to the 0.7 to 0.6, the correlation between Bitcoin and gold increased from a mere 0.07 to a much more noticeable 0.22.

Even though the numbers show a clear change in the pattern, coefficients for Bitcoin and gold are still way too small to infer a significant correlation. Still, it appears to be statistically interesting to note how the decrease in the correlation with altcoins seems to be accompanied by an increase with the pairing in the evolution of gold prices.

Authors are of the opinion that it is to be expected that Bitcoin becomes more correlated with gold in the future, if it is to fulfill the “digital gold” promise:

“These past few months could be an indication that Bitcoin is already viewed as a digital alternative to gold”.

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