Bitcoin price seems to be highly correlated with gold and stock market prices.
Speculators chose to turn to different entities in order to avoid a possible loss due to the economic chaos caused by the pandemic.
Gold, which has increased during the epidemic, continues to increase. There is an increase in trade activity compared to last year, but the printing of the US currency extended the price increase.
Recently, Bitcoin as an alternative to gold has gained traction. Although the BTC price experienced a crash in March when the pandemic started, it took a bullish turn.
Looking at the last two months, it is possible to see the correlation of gold and BTC at a record level.
Experts say that the dollar should be based on the dollar instead of gold as the reason for the volatility in price action.
As the US Dollar depreciated, the Federal Reserve allowed inflation to rise above its 2% annual target. This means that as time progresses people will not be able to buy the same assets with the same amount of money. Hedges will become attractive during this period.
The record correlation between Bitcoin and gold shows that investors did not see a difference between the two because they are similar and serve the same purpose as their value.
However, Bitcoin appears to correlate with the SP 500 as well. Because, there are those who see BTC, which is seen as a value by some investors, as an investment that will increase their wealth.
Both the BTC and the SP 500 reached a historical correlation during the pandemic.
The SP 500 is influenced by many factors, including the valuation of markets, economic trends and geopolitics.
When the graphs are examined, it is seen that the correlation has increased only to fall in the negative region.
