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Bitcoin Correlation to Gold Nears All-Time High as ETFs Hit Wall Street

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The correlation between Bitcoin and gold prices has climbed to new heights in recent months after a bullish close to 2023 and the approval of a spot Bitcoin ETF.

Bitcoin’s correlation to gold has fluctuated during much of the digital asset’s history. This means the two assets’ prices have moved mostly independently—when one rose, the other didn’t necessarily follow. But the correlation grew tighter after the market crash in 2020 at the start of the COVID-19 crisis, and it’s now once again approaching historical levels.

The Bitcoin to gold correlation currently stands at 0.76 (or 76%). A correlation of 1 means there is a perfect, positive correlation between two variables, in this case the price of Bitcoin and gold (-1 would mean a perfect, negative correlation). And while the Bitcoin-gold correlation is not yet at all-time levels, it’s now getting closer.

“Bitcoin’s relationship with [traditional finance] markets has been consistently evolving,” cryptocurrency exchange Binance noted in a report published earlier this month. “Currently, Bitcoin’s correlation with the S&P 500 is at its lowest in more than three years.” Bitcoin correlation to gold witnessed a notable surge, sitting at approximately 75% by the end of 2023, according to Long Term Trends. This peak coincided with global central banks adopting interest rate hikes, signaling a temporary shift in stock market behaviors.