Bitcoin and gold increasingly move in lockstep

The correlation between Bitcoin and gold has reached its highest level in nearly six years. The 90-day correlation now stands at +0.50, almost matching the record set during the 2020 coronavirus pandemic. That figure has more than doubled since the start of this year. At the same time, the correlation between Bitcoin and the Nasdaq 100 has fallen to a one-year low of around +0.30.

In short:

• The 90-day correlation between Bitcoin and gold has risen to +0.50, close to the highest level ever recorded.
• The correlation with the Nasdaq 100, by contrast, has fallen to +0.30, the lowest point in a year.
• An announcement by the US Department of the Treasury on debt buybacks appears to have accelerated the shift.

Correlation near record level

According to an analysis by Bitwise Asset Management, based on Bloomberg data and cited by The Kobeissi Letter, the 90-day correlation between Bitcoin and gold stands at around +0.50. That is almost identical to the historical peak set in 2020. For comparison: after the recovery from the 2022 bear market, that same correlation only reached +0.30.

A correlation between -0.5 and +0.5 is traditionally considered low or negligible, but the recent rise towards the upper end of that range shows that the two assets have moved increasingly in the same direction over recent months. Bitcoin is currently trading around $79.832, up 0.2% over the past 24 hours.

US Treasury announcement as catalyst

The Kobeissi Letter points out that the rise accelerated after an announcement by the US Department of the Treasury on 19 August. The department said it would at least double its buyback of long-dated government bonds, from $2 billion to $4 billion per transaction. According to The Kobeissi Letter, investors see this as a sign of possible currency debasement, prompting them to turn to both gold and Bitcoin more often as protection.

The shift is also visible in the opposite direction: the correlation between Bitcoin and the Nasdaq 100 is falling to around +0.30, the lowest level in a year. That suggests Bitcoin is gradually moving away from technology stocks and starting to behave differently from the broader equity market.

Bitcoin increasingly seen as an alternative to gold

The combination of a higher gold correlation and a lower Nasdaq correlation fits a broader shift in how investors position Bitcoin. Whereas Bitcoin was long regarded as a risky speculative investment that moved in tandem with technology stocks, it now behaves more like a safe haven comparable to gold.

Whether this trend persists will depend in part on the Treasury’s future policy and on how financial markets respond to the possibility of further dollar debasement.