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Bitcoin Bolsters Claim as a Haven With Rally Topping Gold’s

Brandon Kochkodin
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Bitcoin Bolsters Claim as a Haven With Rally Topping Gold’s

(Bloomberg) -- 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 5.8% while gold rose as much as 1.1%.

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 $12,000 a coin last summer to less than $7,000 in the fall, gold rallied by about 20%.

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.

(Updates price increase in the second paragraph.)

To contact the reporter on this story: Brandon Kochkodin in New York at bkochkodin@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Randall Jensen

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