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Bitcoin correlation to gold rises in face of global recession risk

Finally, “behavioral finance” is the most prominently used author keyword in the JBEF’s publications, followed by “financial literacy” All in all, these findings should offer readers a retrospection of scholarly contributions from the JBEF. In this paper, we aim to identify which one is more informative in determining the price fluctuations in a system consisting of three commonly used hedging assets, i.e. Multifractal detrended cross-correlation analysis (MF-DCCA), multivariate GARCH and information share analysis are utilized to achieve this purpose.

Since September 2015, Redman has written more than 6,000 articles for News about the disruptive protocols emerging today. Dollar since 2018 and demonstrates the correlation rate between gold and Bitcoin with the blue line. Historical data on the Bitcoin and gold correlation suggests that times of high correlation presage a price bottom for Bitcoin. BTC/XAUAs the chart above also demonstrates, the price correlation of Bitcoin and gold and bitcoins gold has been above the 0.50 rate since early May, except for a short timeframe between mid-July and early August. The current correlation rate of Bitcoin and gold is at 0.85, which means that these assets move in the same direction with 85% accuracy. With inflation at historic highs, you’d expect this would be bitcoin’s time to shine — U.S. consumer prices last month rose the most since February 1982, according to Labor Department figures.

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«Exchange outflows for 3 of the prior 4 weeks (BTC +2% last 4 weeks) indicate that investors continue to HODL instead of selling into strength,» Shah and Moss said. In an environment where investors expect a hawkish FED and a decline in economic growth, the correlation between assets class trends upwards.

Gold and bitcoin correlation

Geopolitical tensions and climbing inflation are among the key factors weighing down on bitcoin’s price. Bitcoin is often visualized as a golden coin with a capital “B”.1 This visualization has potentially enforced the idea or narrative that Bitcoin is similar to gold . Indeed, Bitcoin is often labeled new gold, digital gold or gold 2.0.2Klein et al. and Smales analyze the similarity of Bitcoin and gold (see also Dyhrberg, 2016, Baur et al., 2018b, Baur et al., 2018a, Gkillas and Longin, 2019). Bitcoin and other cryptocurrencies were little changed Tuesday as they continued to exhibit an uncharacteristic lack of volatility. 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. The world’s largest cryptocurrency is sitting at just under $20,000, a far cry from its all-time high of $68,000. A correlation of +1.0 means two assets move in perfect synchrony in the same direction.


This study examines the prediction power of the ratio of gold to platinum prices on Bitcoin. By using different models and data sources for Bitcoin, we find that GP predicts future Bitcoin return. When the price of gold relative to platinum increases, Bitcoin return also goes up. This finding is consistent with Gold and bitcoin correlation previous studies and contributes to the ongoing discussion whether GP can be used as an indicator for aggregate market risk. Using variance decomposition, we also find that volatility in the gold and platinum market can influence Bitcoin volatility and that this relationship shows time-varying dependency.

Our results show that Bitcoin behaves as the exact opposite and it positively correlates with downward markets. Lastly, we analyze the properties of Bitcoin as portfolio component and nd no evidence for hedging capabilities. We conclude Forex that Bitcoin and Gold feature fundamentally different properties as assets and linkages to equity markets. As of now, Bitcoin does not reflect any distinctive properties of Gold other than asymmetric response in variance.

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