Bitcoin and gold have become more closely aligned during the latest sell-off in the bond market, with their 90-day correlation reaching its highest level in almost six years, data from Bitwise shows.
The relationship strengthened after yields on longer-dated US Treasury bonds rose and Treasury Secretary Scott Bessent increased purchases of long-term debt. Bitcoin gained 22.4% in the following week, its strongest weekly performance since March 2024. Gold rose by about 5%, while equities declined, according to Andre Dragosch, director of research for Bitwise in Europe.
The last comparable level of correlation was recorded in 2020, around the period when governments and central banks introduced large fiscal and monetary measures in response to the Covid crisis.
Bitwise’s 90-day data also showed bitcoin was negatively correlated with the US Dollar Index at the end of August. That suggests pressure on the dollar has recently been supportive of both bitcoin and gold.
“When things get serious and macro forces are strong, investors are discriminating less and less between bitcoin and gold as they navigate rising currency debasement risks,” Dragosch said. “In those scenarios, bitcoin has recently started to look like an amplified version of gold.”
Bitcoin’s relationship with shares
Bitcoin’s 30-day correlation with the S&P 500 fell close to zero during its rally in August, according to analysts at Glassnode. US shares were broadly unchanged over the same period.
However, Glassnode said sharp breaks in the relationship between bitcoin and equities during sovereign bond sell-offs have generally been “short-lived”. Historically, the analysts said, such moves have signalled a temporary exhaustion in the market rather than a lasting change in investment behaviour.
Bloomberg senior ETF analyst Eric Balchunas said bitcoin had shown a weaker correlation with US equities than gold, small-cap shares, emerging-market assets and even US Treasury bonds over the previous six months.
“Bitcoin has always been about .40, it’s gold and Treasurys that have become much more correlated,” he said. “Small window of time to be sure, but still notable and blows up the claim that it’s just QQQ.”
Bitcoin price levels and ETF flows
Bitcoin moved above $80,000 towards the end of August after rising 25% over the month, before retreating towards $76,000.
Glassnode identified a concentration of long-term holder supply between $83,000 and $86,000. The firm placed its main accumulation floor between $62,000 and $65,000, leaving bitcoin trading between those two areas at approximately $77,600.
When bitcoin was priced at about $78,000 in late August, 68% of its supply was in profit, Glassnode said. That compared with 65% when the cryptocurrency was trading at a similar level in May.
Spot bitcoin exchange-traded funds recorded average daily inflows of $290m at the peak of the rally. Daily trading volume in those funds remained close to $3bn.
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