Bitcoin's Correlation to Gold Hits 11-Month Low

Bitcoin’s 30-day correlation with gold dropped to an 11-month low this week. Since gold’s peak on October 30, its price has dropped 8% while Bitcoin has risen almost 30%.

The difference is even more striking if we just look at post-election performance. Since November 5, gold is down 6.3% while Bitcoin is up more than 33%.

So, what does this mean? Not much, to be honest. Some people have been quick, too quick, to point out that "digital gold" should move in lockstep with its analog counterpart and that a move like this disproves the thesis.

However, the negative correlation is very short-term and doesn’t say anything about the long-term narrative. Bitcoin is still maturing as an asset class and has rallied on the outlook for improved regulation and potential adoption by nation states. Gold seems to have dropped on the back of a stronger dollar and might have even seen some outflows going into Bitcoin.

But the long-term trend is what really matters. Time to zoom out and watch the action over the coming months and years. I own both and will continue to do so.

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