The strong correlation between Bitcoin and gold remains despite growing economic uncertainty.
By James Van Straten | Edited by Sheldon Reback
Bitcoin has a strong positive correlation with gold at 0.70, which distances it from technology stocks. It also has a correlation with the Nasdaq 100 at 0.53.
Bitcoin is approaching $95,000 after its best weekly performance since late 2024.
Despite President Trump's aggressive tariffs on China that have slowed global shipments of goods, Bitcoin continues to demonstrate resilience in the face of broader economic instability.
Bitcoin (BTC) returned to positive territory this year for the first time in nearly two months, approaching $95,000, erasing a decline of about 18%.
Its current performance, up less than 1.5% since December 31, places it between gold, which has risen 24%, and the Nasdaq 100, which has fallen more than 7%. As a result, the narrative portraying Bitcoin as either a leveraged technology stock or digital gold is leaning slightly toward the digital gold narrative. But only just.
Analyzing Bitcoin's correlation coefficients on a 30-day moving average, the largest cryptocurrency by market capitalization now exhibits a strong correlation with gold of 0.70 and a weaker correlation with the Nasdaq 100 of 0.53. This suggests that Bitcoin more closely aligns with the behavior of gold than with technology stocks. Correlation values range from 1, a strong positive correlation, to -1, a strong negative correlation.
Bitcoin's price rose 10% last week, its strongest performance since the week ending November 17 during the price rally following President Donald Trump's election victory.
Meanwhile, Trump's tariffs continue to fuel economic uncertainty. US tariffs on Chinese goods were raised to 145% earlier this month, significantly reducing demand for freight shipments, according to Bloomberg. As the report states, major retailers, such as Walmart, are warning of the potential return of empty shelves and higher prices, reminiscent of the COVID era.
