all about cryptop referances
Amid the economic uncertainty affecting a myriad of countries worldwide, Bank of America Securities market strategists explained in a note this week that the leading crypto asset bitcoin has become correlated with the well-known 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 continues.”
Market strategists from Bank of America’s securities division, Alkesh Shah and Andrew Moss, detailed this week that bitcoin and gold have been highly correlated in recent times. The news follows the recent report published by crypto data provider Kaiko, which states that bitcoin has been less volatile than the Nasdaq and S&P 500 indices. According to Bank of America strategists, bitcoin’s (BTC) price volatility, relative to other global assets, has led investors to believe that BTC is a safe haven.
“A declining positive correlation with SPX/QQQ and a rapidly rising correlation with XAU indicates that investors may view bitcoin as a relative safe haven as macro uncertainty continues and a market bottom remains to be seen,” Bank of America’s securities division analysts wrote.
On Monday, October 24, both bitcoin (BTC) and gold prices have been in a range, and have been less volatile compared to the stock markets. BTC trades for just over $19K per unit, while an ounce of 0.999 fine gold changes hands for 1,646.70 nominal US dollars. Bank of America’s Shah and Moss have been monitoring the 40-day correlation with gold, which is around 0.50 this week. The 0.50 rating is much closer and shows a stronger correlation to the precious metal than the zero rating that leading crypto asset BTC recorded in August.
The move comes at a time when macro uncertainty has increased, and analysts have warned that rate hikes by the US central bank could lead to a liquidity crisis for US Treasuries. Market observers expect an aggressive rate hike next month, but strategists also believe the Fed will swing by December. Both gold and BTC have fallen heavily since the two assets’ record high prices. For example, gold lost a lifetime price against the US dollar on March 8, 2022, when it reached $2,074 per ounce.
Gold has lost 20.49% against the US dollar since its all-time high 230 days ago. The crypto-asset bitcoin (BTC) has shed 72% against the dollar over the past year, after losing $69,044 per unit on November 10, 2021. Gold currently has a total market cap of around $10.895 trillion, while BTC’s market cap is around $369 billion .
What do you think of Bank of America’s Shah and Moss explaining that gold and bitcoin have been correlated over the past 40 days? Do you think investors perceive bitcoin as a safe haven amid today’s macro uncertainty? Let us know your thoughts on this topic in the comments section below.
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