Gold vs BTC correlation signals Bitcoin becoming safe haven: BofA

Despite the ongoing cryptocurrency carnivore market, investors person been progressively looking astatine Bitcoin (BTC) arsenic a harmless haven, a caller survey suggests.

The emergence successful correlation betwixt Bitcoin and golden (XAU) is 1 of large indicators demonstrating investors’ assurance successful BTC amid the ongoing economical downturn, according to integer strategists astatine the Bank of America.

Bitcoin’s correlation with golden — which is commonly viewed arsenic an ostentation hedge — has been connected the emergence this year, hitting its highest yearly levels successful aboriginal October. The increasing correlation inclination started connected Sept. 5 aft remaining adjacent to zero from June 2021 and turning antagonistic successful March 2022, BofA strategists Alkesh Shah and Andrew Moss said successful the report.

“Bitcoin is simply a fixed-supply plus that whitethorn yet go an ostentation hedge,” the strategists wrote. The maturation successful BTC/XAU correlation is not the lone indicator signaling increasing investors’ assurance successful Bitcoin arsenic a store of worth though.

Source: Bank of America

Bitcoin has besides been progressively correlated with large stocks similar the S&P 500 (SPX) and Nasdaq 100 (QQQ). The correlation betwixt Bitcoin and some SPX and QQQ reached all-time highs connected Sept. 13, the BofA strategists wrote, adding:

“A decelerating affirmative correlation with SPX/QQQ and a rapidly rising correlation with XAU bespeak that investors whitethorn presumption Bitcoin arsenic a comparative harmless haven arsenic macro uncertainty continues and a marketplace bottommost remains to beryllium seen.”

BofA strategists besides mentioned monolithic Bitcoin outflows from exchanges to idiosyncratic oregon self-hosted wallets. According to the study, play BTC speech outflows successful aboriginal October were the largest since mid-June, marking the 3rd consecutive week of outflows. The strategists emphasized that ample and continuous outflows to idiosyncratic wallets bespeak constricted near-term merchantability pressure, stating:

“Investors transportation tokens from speech wallets to their idiosyncratic wallets erstwhile they mean to HODL, indicating a imaginable alteration successful merchantability pressure.”

The BofA strategists mentioned that the report’s methodology included information from large Bitcoin exchanges, including Binance, Coinbase, Coincheck, FTX, Gemini, Kraken and others.

Related: Bitcoin profitability for semipermanent holders declines to 4-year low: Data

“The blockchain’s transparency gives america penetration into the integer plus ecosystem that's not disposable successful accepted fiscal markets,” the analysts stated.

The caller study comes amid the rising risks of the planetary economical recession, driving much request for the ostentation hedge. Bitcoin has mislaid astir 70% of its marketplace worth amid the monolithic crypto wintertime of 2022, triggering much skepticism implicit its presumption arsenic an ostentation hedge.