As we all know, Bitcoin is regarded as "digital gold", and some people think that investors also see this cryptocurrency as a safe-haven asset in a globally unstable situation. The recent conflict between the United States and Iran seems to prove it. When tensions between the two countries flooded the days of early 2020, bitcoin prices began to rise in the same period.
However, long-term data has led to different conclusions. As we discovered at this time last year, there is virtually no correlation between the price of Bitcoin and gold.
Bitcoin seems to have become a safe-haven asset under global turmoil. We have pointed out that during the Greek debt crisis in June 2015, the Brexit referendum in June 2016, and the November 2016 Donald Trump election, Bitcoin has performed strongly.
However, the level of correlation between Bitcoin and gold has remained roughly constant throughout almost traceable history. Although some people claim that Bitcoin has become a safe-haven asset during turbulent times, the fact is that as of October 2019, there was a slight negative correlation between this cryptocurrency and gold.
Although the numbers we get when we use another correlation measure are better, they are still not enough to show that these two assets are highly correlated. In addition, it turns out that reports of an increase in the price correlation between Bitcoin and gold are only short-lived.
Although after the killing of the senior commander of the Iranian Islamic Revolutionary Guards (Qasem Suleimani), the price of bitcoin did rise with gold, but in fact the correlation between the long-term trend of bitcoin and the price of gold is still weak. An event does not prove a trend, let alone the price of bitcoin and gold has run counter to each other multiple times.
In general, the analogy of digital gold still applies to Bitcoin, because it is a non-political, uncontrolled digital asset; however, as a safe-haven asset to obtain status equivalent to gold, There is a long way to go. Looking ahead, we should pay close attention to the price correlation between Bitcoin and gold, because the higher price correlation between the two may indicate that Bitcoin distance is a step closer to becoming a recognized alternative to value storage.
