According to an expert with the Bank of America, the flagship cryptocurrency might retake its place as a safe haven among investors. This speculation stems from a noticeably striking similarity between gold and Bitcoin.
Bitcoin May Soon Become A Safe Haven Again
Bloomberg reported new data on Bitcoin and gold. As per the information, the leading digital asset recorded affiliation with gold went from 0 to 0.5 in August. Andrew Moss and Alkesh Shah, the Bank of America experts, confirmed the report.
Furthermore, it shared a sheer affinity with indexes that dropped below record highs. The S&P 500 hit 0.56, while the Nasdaq touched 0.72. Andrew and Alkesh noted that investors might revert to Bitcoin while deeming it a safe haven.
Besides, the prevalent macroeconomic condition will make it so. Also, the data showed a shift in the asset’s disposition to move following the equity market.
Both assets swerved from the course, followed by stocks, which has seen them slide drastically. Finally, a Bitcoin advocator claimed that digital gold serves the same purpose as BTC. But with the parity solid, it begs the question, will Bitcoin and gold continue in synchrony?
Clara Medalie said what is happening is a discrepancy between the equity and crypto markets. She added that this is observable in Bitcoin’s affinity with gold.
The thirty-day similarity between both assets climbed to 0.3 two weeks ago. That was the highest it’s attained in a year. However, since last year, it has lingered at 0.2.
Bitcoin Detangles From Equities
Generally, 0.3 means a mild positive sync between both assets. Meanwhile, 0.5 is considered adequately strong. However, when the numbers are negative, it indicates a feeble correspondence.
It is worth noting that Bitcoin has lost more points than gold in 2022. Clara attributed the outcome to the Russian-Ukraine war and a gloomy economic outlook. Markets feared these circumstances’ impact and pressured the market to sell off.
But the discrepancy soon disappeared as investors sought shelter from these assets. Several Bitcoin exponents believe that BTC could be a hedge against an economic crisis. Therefore, comparing it to gold, ever known for its ability to keep value.
Given the ongoing macroeconomic commotion, investors couldn’t care less which asset beats the other. Instead, they prefer one that sustains the value of their funds. Unfortunately, fiat currency is not an option due to its high volatility.
Kaiko maintained that cryptos outperformed equities in quarter three, especially BTC. Unlike S&P 500, which fell 5 percent, Dow Jones 4 percent, and Nasdaq 6 percent, Bitcoin only dropped 1 percent.
Clara stated that it is too soon to predict whether the present Bitcoin-gold synchrony will strengthen or weaken. Besides, there is still a low volume of Bitcoin. Also, the king coin has swayed between $19k and $22k for two months now.