Correlation between bitcoin and gold has been one of the favourite industry-related topics lately. Bitcoin’s key narrative as “digital gold” has been relevant as the asset is considered to be in the same scarce resource segment with physical gold. In 2019, bitcoin’s correlation with gold grew from May negative values to positive 0,17 in early July. Towards Q1 2020 the correlation has been weakening with 0,09 by the release of this blog post.
The mounting panic (or potential pandemic) stemming from coronavirus hit S&P500 and Dow Jones hard in mid-February as it became imminent that China is unable to contant the virus within its borders. Alongside stocks, bitcoin also was hit.
In addition to bitcoin, gold also suffered by COVID-19. Last year was a brilliant for gold (GLD) 18,36% annual change, in 2020 alone gold is up 22,9% YTD. However, COVID-19 caused gold to retrace in late February as well.
