Bitcoin’s claim for being digital gold appears to have another piece of evidence in its corner.
In a day where global stocks plunged on concerns over the impact of the deadly coronavirus, the largest cryptocurrency gained as much as 3.5 per cent while gold rose as much as 1.1 per cent.
Of course one day of trading does not a safe haven make. Critics of the assertion, or some would say mantra, that Bitcoin is a digital analogue to the precious metal could rightly point to a falling short-term correlation between the two assets throughout the fourth quarter of 2019. As Bitcoin’s price fell from more than US$12,000 a coin last summer to less than US$7,000 in the fall, gold rallied by about 20 per cent.
But since the beginning of the new year, the two assets 60-day correlation has flipped from negative to positive. The correlation coeffecient now stands at 0.21, up from a low of negative 0.15 in December, and above the trailing one-year daily average.
Don’t care for statistical analysis? Well then take a look at how the cryptocurrency performed on another tumultuous day this year. Bitcoin and gold moved in tandem in the hours after Iran retaliated with a missile strike against the U.S. for the killing of General Qassem Soleimani.
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