Bitcoin-Gold Correlation Hits Six-Year High

Bitcoin's (CRYPTO: $BTC) correlation with gold has reached its highest level since the Covid-19 pandemic struck in 2020.

Bitcoin and gold have moved more closely together amid rising bond yields and a market selloff, with their 90-day correlation reaching a six-year high, according to data from Bitwise.

In recent years, Bitcoin has traded more inline with technology stocks than gold. However, BTC has moved away from equities during the latest spate of market volatility. 

Instead, Bitcoin has largely traded in tandem with gold as yields on longer-dated U.S. Treasury bonds moved higher. 

Bitcoin rose nearly 25% in the second half of August during the bond market turmoil, while gold's price climbed 5% higher and stocks declined. 

The last time Bitcoin and gold were this correlated was in 2020 when governments and central banks responded to the pandemic with fiscal and monetary stimulus. 

Bitcoin was also negatively correlated with the U.S. dollar at the end of August, according to Bitwise. This implies that headwinds for the dollar are tailwinds for Bitcoin and gold.

At the same time, Bitcoin's 30-day correlation with the benchmark S&P 500 index fell toward zero during its August rally. 

The growing correlation to gold is positive for Bitcoin advocates who have long argued that the cryptocurrency should be seen as a store of value similar to gold bullion. 

Some analysts and investors refer to Bitcoin as "digital gold."

The price of BTC is at $78,500 U.S. on Sept. 3. Gold is trading at $4,540.00 U.S. per ounce.