1. Comparison of price volatility between gold and Bitcoin

Data source: Bloomberg, CoinMarketCap, compiled by the author

As can be seen from the table, the annualized volatility of Bitcoin has always been higher than that of gold, especially in 2020, when the volatility of Bitcoin was close to over 60%, far exceeding the volatility of gold. The correlation coefficient varies in different years. In 2020, the two showed a high correlation, and after 2021, this correlation dropped sharply, indicating that the market's perception and behavior of Bitcoin has changed.

2. Comparison of Bitcoin and Gold Price Changes over the Same Period

To gain a deeper understanding of the dynamic relationship between gold and Bitcoin, we can analyze the relationship between their price changes and market events. The following table shows the performance of Bitcoin and gold during significant market events.

Data Source: Refinitiv, Yahoo Finance

From the table, we can see that during significant market events, the price movements of gold and Bitcoin exhibit different behaviors. For example, during the outbreak of the COVID-19 pandemic in March 2020 and the initiation of quantitative easing by the Federal Reserve, both gold and Bitcoin experienced price increases, showing a certain degree of correlation. Conversely, during the period of global economic recession concerns in 2022, Bitcoin saw a significant decline while gold remained relatively stable.

3. Analysis of Capital Flows between Bitcoin and Gold

By analyzing capital inflow/outflow data, we can better understand the relationship of capital conversion between the gold and Bitcoin markets. The following data reflects the flow of major investment funds and institutional capital between Bitcoin and gold from 2020 to 2023.

Data Source: World Gold Council, CoinMarketCap

This indicates that when interest in the Bitcoin market is high, there is a significant influx of funds into Bitcoin, while the inflow of funds into the gold market decreases. Conversely, when Bitcoin experiences corrections or significant price fluctuations, investors often shift their funds to the gold market as a safe haven option.

4. The Relationship between Market Sentiment and Bitcoin, Gold Prices

We can analyze the impact of statements made by figures like Musk and Trump on market sentiment through sentiment indices from social media, especially data from platforms such as Twitter and Reddit.

Data Source: Sentiment Analysis Tools, CryptoCompare

This indicates that the statements made by Musk and Trump have a significant impact on market sentiment, especially when they send positive or negative signals about Bitcoin, causing rapid changes in market sentiment that lead to price volatility in Bitcoin and gold.

Conclusion

Based on the above tables and data analysis, we can draw the following conclusions:

  1. Gold and Bitcoin have safe-haven properties, but they behave differently during periods of uncertainty and changes in market sentiment. Gold, as a traditional safe-haven asset, exhibits a more stable hedging function during severe market fluctuations, while Bitcoin's price volatility is greater and is more influenced by technical factors and market sentiment.

  2. The liquidity of funds in the Bitcoin market is higher than that in the gold market, especially in cases of inflows from institutional investors and funds, where the capital flow in the Bitcoin market exhibits greater elasticity, while gold's inflow is more driven by the need for value preservation.

  3. The statements made by figures like Musk and Trump have a significant impact on market sentiment and prices; their actions have a direct effect on Bitcoin price fluctuations, while gold is more influenced by macroeconomic factors and central bank policies.

These data indicate that although gold and Bitcoin share similarities in certain aspects, they exhibit different characteristics under market reactions, capital flows, and policy influences. Investors need to make corresponding choices based on the market environment, personal investment strategies, and risk tolerance.