Data analytics and trade execution services provider, Skew, announced the correlation between the prices of gold and cryptocurrency, Bitcoin in a tweet last August 10.
Bitcoin/Gold 1 mth correlation reaching new all-time highs, giving momentum to the store-of-value narrative for BTC in these "money printer go brrr" times. pic.twitter.com/hr7l8GPvF8— skew (@skewdotcom) August 10, 2020
A record high of 70% sent prices soaring for both values, a visible improvement from the 60% monthly average reached during the second quarter of this year. The increasing correlation puts BTC value in a good light, supporting its legitimacy as a financial asset and a store of value. This bodes well especially during this time when the economy is at a fragile state.
The gold and bitcoin markets are at a steady increasing pace so far this year, due to the issuance of fiat money by governments and federal bank reserves as a way to cope with the economic decline during the pandemic.
Last August 11, Tuesday, gold prices crashed by 4.7% while bitcoin for 3.9%, the biggest single-day decline after seven years. With this, financial experts suggest investors should go for “hard assets” for stable investments and for market observers to sell their assets.
Economies are taking serious hits over the course of the pandemic. Governments all over the world are compelled to bring out trillions of stimulus money to cope. Safe assets are increasing in value alongside the threat of the US dollar decline.
Bitcoin is predicted to develop into a value similar to gold in the coming years. It is likely that the leading cryptocurrency will become a form of “digital gold.” As the world slowly transitions to an online economy, cashless wallets will be more of a convenient necessity instead of a luxury. Digital ledgers and accounts are becoming more appealing due to its transparency, accessibility, security, and versatility.