Nothing in common: gold and bitcoin are completely uncorrelated

Nothing in common: gold and bitcoin are completely uncorrelated
CONTENT

  • Gold is the only defensive asset

  • Bitcoin showed complete uncorrelation with gold

  • Gold is up 34%, while Bitcoin is down nearly 20%

Nothing in common: gold and bitcoin are completely uncorrelated

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For a long time, cryptocurrency experts have tried to find the correlation of the main cryptocurrency – bitcoin with gold. Some even argued that the price of MTC directly depends on the value of gold in the market. However, the current dynamics show an inverse relationship.

During the financial crisis caused by the coronavirus pandemic, gold is the only asset that proved to be a defensive asset and could only strengthen in value against the backdrop of falling stock, commodity and foreign exchange markets. For the first time since 2012, gold surpassed the $ 1,700 mark and is now trading at $ 1,710 an ounce. Since March 19, 2020, gold has increased in value by 34%, and, as experts say, the precious metal will only continue to strengthen in the market.

Thus, the famous American businessman and founder of Shiffgold, Peter Schiff, is confident that in the near future gold will rise sharply in price. He announced this on his official Twitter page..

Nothing in common: gold and bitcoin are completely uncorrelated

If you think the price of #gold is expensive now that its above $ 1,700 wait another week and see how expensive it is. In relation to the amount of money the Fed has already printed, and the amount it’s about to print, gold at today’s price is one of the best bargains one can buy.

– Peter Schiff (@PeterSchiff) April 13, 2020

First of all, the rise in the cost of the precious metal was caused by the active demand in the market. At the moment, central banks are building up their gold and foreign exchange reserves against the backdrop of an additional issue of the dollar. Now the dollar cannot be a “hard” currency, so governments are increasingly turning to gold as a defensive asset.

Central banks added another 36 tons of gold to their reserves in February, according to Shiffgold. Turkey is the main buyer of the precious metal in the world. In February, the Central Bank of the Republic of Turkey purchased 24.8 tons of gold. The second place was taken by Russia, which added another 10.9 tons of gold to its reserves. Other countries that actively buy the precious metal include Bulgaria – 0.3 tons, Greece – 0.1 tons, Kazakhstan – 1.8 tons and Qatar – 1.6 tons.

What about bitcoin?

Nothing in common: gold and bitcoin are completely uncorrelated

 

While gold is actively being sold, mined and appreciated, bitcoin continues to decline in value. Last week, BTC showed the maximum growth and for the first time since March exceeded the $ 7,000 mark. Crypto enthusiasts attributed this growth to an increase in interest in cryptocurrencies on the part of institutional investors and the approaching halving, and have already predicted an increase to $ 10,000. However, on Monday, bitcoin rolled back to the $ 6800 mark and today is trading at $ 6900.

Nevertheless, the charts show a complete uncorrelation of bitcoin and gold, so there is no need to talk about the relationship between these two assets..

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