Notably, the reality of becoming a safe haven might be realized with the flagship cryptocurrency recording increased correlation with the precious metal amid prevailing macroeconomic factors. In particular, Bitcoin has hit a 40-day correlation with gold standing at 0.50 after the value stood at around zero in mid-August, Bloomberg reported on October 22. The correlation is putting Bitcoin into a focus as digital gold, following a period when the cryptocurrency has traded mainly in tandem with the equities. Notably, both asset classes have been hammered by the prevailing inflation and interest rate hikes.
Bitcoin’s dropping volatility
However, Bitcoin’s value has been consolidating around the $20,000 level for weeks, a key driver for the asset’s dropping volatility. Notably, the asset has also emerged as less volatile than some equities products like the Dow Jones index, with the metric approaching an all-time low.
Bitcoin and gold’s potential to rally
As both Bitcoin and gold battle for safe haven status, a section of the crypto market believes the assets have a chance of recording significant returns in the future alongside protecting wealth. As per a Finbold report, the author of the personal finance book ‘Rich Dad, Poor Dad’ Robert Kiyosaki, has maintained that the economy is likely to crash, and both Bitcoin and gold can act as a store of wealth. Furthermore, Bloomberg Intelligence commodity strategist Mike McGlone has maintained after the widespread market correction in the first half of 2022 that both Bitcoin and gold are among the assets to lead the recovery. At the same time, the analyst suggested that Bitcoin’s ability to remain stable after the latest Federal Reserve interest rate hikes indicates that the asset is maturing. In the meantime, Bitcoin continues to consolidate around the $19,000 level, trading at $19,100 by press time. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
