Bitcoin’s rising correlation with gold suggests investors are seeing it as a safe haven, Bank of America market strategists say – Finance Bitcoin News


Amid economic uncertainty affecting countless countries worldwide, Bank of America Securities market strategists explained in a note this week that leading cryptocurrency bitcoin is tied to the popular precious metal gold. Bank of America analysts Alkesh Shah and Andrew Moss noted that “investors may view bitcoin as a relative safe haven as macro uncertainty persists.”

Bitcoin’s Rising Correlation With Gold “Investors May View Bitcoin As Relative Safe Haven,” Bank of America Market Strategists Say

Alkesh Shah and Andrew Moss, market strategists in Bank of America’s securities division, in detail this week bitcoin and gold have been highly correlated lately. The news follows a recent report by crypto data provider Kaiko that said bitcoin is less volatile than the Nasdaq and S&P 500 indices. According to Bank of America strategists, bitcoin (BTC) price swings relative to other global assets have led investors to consider BTC a safe-haven asset.

Analysts at Bank of America’s securities division write: “The weakening positive correlation with the SPX/QQQ and the rapidly increasing correlation with the XAU suggest that investors may view bitcoin as a relative safe haven as macro uncertainty persists and the market bottom is not yet in sight. “.

Market Strategists at Bank of America say Bitcoin's rising correlation with gold suggests investors are seeing it as a safe haven.
editorial photo credit: Bloomberg

On Monday, October 24, both bitcoin (BTC) and gold prices were in a range and less volatile than the stock markets. BTC is trading at just over $19K per unit, while .999 pure gold is trading at a nominal $1,646.70 per ounce. Bank of America’s Shah and Moss is tracking the 40-day correlation with gold around 0.50 this week. The 0.50 rating is closer to leading cryptocurrency BTC’s zero rating recorded in August and shows a stronger correlation to the precious metal.

The move comes at a time of heightened macro uncertainty, and analysts have warned that a rate hike by the US Federal Reserve could trigger a US Treasury liquidity crisis. Market watchers expect an aggressive rate hike next month, but strategists also believe the Fed will turn around by December. Both gold and BTC have fallen sharply since the two assets’ all-time highs. For example, gold hit a lifetime high against the US dollar on March 8, 2022, at $2,074 an ounce.

Gold is down 20.49% against the US dollar, which hit an all-time high 230 days ago. After reaching $69,044 on November 10, 2021, the cryptocurrency bitcoin (BTC) has lost 72% against the dollar in the past year. Today, the total market capitalization of gold is about $10.895 trillion, while the market capitalization of BTC is about $369 billion. .

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What do you think of Bank of America’s Shah and Moss explanation that gold and bitcoin have been correlated over the past 40 days? Do you think investors view bitcoin as a safe haven amid today’s macro uncertainty? Let us know your thoughts on this topic in the comments section below.

Jamie Redman

Jamie Redman is Head of News at Bitcoin.com News and a fintech journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about disruptive protocols emerging today.




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