Bitcoin Aligns Closer with Gold Amid Hedge Demand

Bitcoin is displaying a stronger alignment with gold as investors hunt for protection against inflation and currency debasement risks. Block Scholes analyst Thahbib Rahman reported that the 90-day correlation has reached its highest since November 2020, climbing to 55% in mid-September and holding at 51% now.

The uptrend started in June and accelerated in August after the US Treasury ramped up its bond buyback program. In the following week Bitcoin jumped more than 20% while gold rose 5%. Both assets are drawing interest as hedges versus soaring sovereign debt and fading fiat purchasing power.

Rahman observed that Bitcoin’s link to equities has eased to around 40% versus the S&P 500 and Nasdaq-100, down from a 62% February peak. Since mid-August, Bitcoin has tracked gold more closely than US stocks for the first time since late 2020.