Gold vs BTC correlation signals Bitcoin becoming safe haven: BofA
Bitcoin's growing correlations with gold, the S&P 500 and the Nasdaq 100 indicate that investors view BTC as a "relative safe haven “, wrote the BofA strategists.< /p>
New
Despite the current cryptocurrency bear market, investors are increasingly viewing Bitcoin (BTC) as a safe haven, according to a new study.
The rise in the correlation between Bitcoin and gold (XAU) is one of the main indicators demonstrating investor confidence in BTC amid the ongoing economic downturn, according to digital strategists at the Bank of America.
Bitcoin's correlation to gold - which is generally seen as a hedge against inflation - has been rising this year, reaching yearly highs in early October. The upward trend in correlation began on September 5 after remaining near zero from June 2021 and turning negative in March 2022, BofA strategists Alkesh Shah and Andrew Moss said in the report.
“Bitcoin is a fixed-supply asset that could eventually become an inflation hedge,” the strategists wrote. The growth of the BTC/XAU correlation is not the only indicator signaling growing investor confidence in Bitcoin as a store of value, however.
Source: Bank of America Bitcoin is also increasingly correlated with major stocks like the S&P 500 (SPX) and Nasdaq 100 (QQQ). The correlation between Bitcoin and SPX and QQQ hit all-time highs on September 13, BofA strategists wrote, adding:
"A decelerating positive correlation with SPX/QQQ and a rapidly increasing correlation with XAU indicate that investors may view Bitcoin as a relative safe haven as macro uncertainty persists and a market bottom remains to be seen. "
BofA strategists also mentioned massive outflows of Bitcoin from exchanges to personal or self-hosted wallets. According to the study, weekly BTC exchange outflows in early October were the largest since mid-June, marking the third consecutive week of outflows. The strategists pointed out that continued large outflows to personal wallets indicate limited short-term selling pressure, stating:
Bitcoin's growing correlations with gold, the S&P 500 and the Nasdaq 100 indicate that investors view BTC as a "relative safe haven “, wrote the BofA strategists.< /p>
New
Despite the current cryptocurrency bear market, investors are increasingly viewing Bitcoin (BTC) as a safe haven, according to a new study.
The rise in the correlation between Bitcoin and gold (XAU) is one of the main indicators demonstrating investor confidence in BTC amid the ongoing economic downturn, according to digital strategists at the Bank of America.
Bitcoin's correlation to gold - which is generally seen as a hedge against inflation - has been rising this year, reaching yearly highs in early October. The upward trend in correlation began on September 5 after remaining near zero from June 2021 and turning negative in March 2022, BofA strategists Alkesh Shah and Andrew Moss said in the report.
“Bitcoin is a fixed-supply asset that could eventually become an inflation hedge,” the strategists wrote. The growth of the BTC/XAU correlation is not the only indicator signaling growing investor confidence in Bitcoin as a store of value, however.
Source: Bank of America Bitcoin is also increasingly correlated with major stocks like the S&P 500 (SPX) and Nasdaq 100 (QQQ). The correlation between Bitcoin and SPX and QQQ hit all-time highs on September 13, BofA strategists wrote, adding:
"A decelerating positive correlation with SPX/QQQ and a rapidly increasing correlation with XAU indicate that investors may view Bitcoin as a relative safe haven as macro uncertainty persists and a market bottom remains to be seen. "
BofA strategists also mentioned massive outflows of Bitcoin from exchanges to personal or self-hosted wallets. According to the study, weekly BTC exchange outflows in early October were the largest since mid-June, marking the third consecutive week of outflows. The strategists pointed out that continued large outflows to personal wallets indicate limited short-term selling pressure, stating:
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