Bitcoin appears as a safe haven with correlation to gold at 2-year highs
Bitcoin, the digital currency once considered a volatile investment, has found a surprising ally in the form of the ancient commodity: gold.
Since March, the correlation between the alpha crypto and the precious metal has steadily increased, giving investors a safe haven in the face of the ongoing banking crisis and rising interest rates.
But what exactly is driving this unexpected partnership between Bitcoin and gold, and how long can it last?
Bitcoin outshines gold amid banking crisis
As the banking crisis continues to rock the financial world, investors are turning to Bitcoin as a safe haven for their money. In fact, many are choosing crypto over the traditional safe haven, gold, due to higher returns and increased stability.
Currently trading near the $30,000 psychological level at $28,936, BTC has recorded an impressive 3% rally in the last 24 hours. This increase in demand for Bitcoin is due to its increasing correlation with gold, which has passed the 50% level and now stands at 57%, as of data by the market analysis firm Kaiko.
The Bitcoin 30-day rolling correlation with gold has increased since March and now stands at 57% – the highest level in nearly 2 years.#BTC #Gold #context pic.twitter.com/l7N5eYAgEl
— Kaiko (@KaikoData) 26 April 2023
This correlation between the digital currency and gold has been steadily increasing since March, when regulators shut down crypto-friendly banks, leading to a banking crisis. As a result, investors have turned to Bitcoin as a more reliable alternative to the yellow metal.
Crypto’s growth as a safe haven
Bitcoin has long been seen as a risky investment due to its volatile price swings and lack of regulatory oversight. However, in recent years it has emerged as one safe harbor asset for investors seeking protection against traditional market risk.
Unlike fiat currencies and other traditional assets, Bitcoin operates independently of central banks, making it less vulnerable to inflation and government interference.
Moreover, Bitcoin’s decentralized nature gives investors greater control over their assets and reduces their exposure to systemic risk.
With the ability to store and transfer wealth across borders without the need for intermediaries, Bitcoin offers a level of financial freedom and security unmatched by traditional assets.
BTC/USD reclaims $29K territory and trading at $29,112 on the daily chart at TradingView.com
Its limited supply and digital scarcity also make it a hedge against inflation, as its value is not subject to the vagaries of government policy or macroeconomic factors.
As a result, Bitcoin has gained increasing recognition as a safe haven, especially in times of financial uncertainty and market volatility.
Its ability to provide investors with a reliable and secure store of value has made it an attractive option for those looking to diversify their portfolios and protect their wealth from external threats.
– Featured image from AndroidCure.com
