Bitcoin vs Gold, price’s extrange relation. – Victor Delgado
Currently, these two words represent a contrast and similarity in their concept and influence in world society.
On the one hand, gold has been for centuries the favorite “currency” to accumulate wealth for its stable and increasingly better value. Read more about this here.
On the other hand, the value of bitcoin has been consolidated since its conception in 2009 in the long term; nevertheless, it is still a very volatile cryptocurrency and, therefore, distrusted by the global economic-financial status quo. Read more about this here.
Here you have a historical chart of bitcoin’s price from 2013–2018:
But there is something in which they resemble each other more and more: people use them to take refuge from currencies or unstable commodities. Read more about this here. Having this similarity, do the prices of these investment alternatives really have any relationship?
Here there’s a chart about both prices over time (2013–2017)
Yes, this chart only shows the tendency of both between 2013 and 2017 but the behavior is practically the same. Gold is stable and bitcoin is not (yet).
No political noise could make bitcoin afraid like others traditional physical currencies.
Correlation between BTC and gold?
As mentioned, Bitcoin introduced digital assets as an investment opportunity. This made a lot of investors interested into exploring this option in more detailed. Bitcoin generated a lot of interest from investors, mainly because of lack of government- and bank-imposed rules.
Back in 2017, many experts claimed there’s a correlation between Bitcoin and gold and they found a missing link to prove it. As a matter of fact, both Bitcoin and gold prices went up during the same period of time. As a consequence, there was a lot of interest from investors in both assets during the same time.
Here is an interesting chart that proves the only 2 moments where both prices practically were the same:
The reason why both prices were almost the same in 2013 and 2016 was because China outflows are accelerating (via the local exchanges), chatter of Mexico being active (as well as Greece, Italy, and France), and the renewed enthusiasm for blockchain (thanks to the ethereum news this week) is all helping drive interest in the virtual currency
The reason why both prices were almost the same in Mar 2017 was because the U.S. Securities and Exchange Commission is expected to rule on a proposal for an exchange-traded fund based on the digital currency.
As it turned out, there was no correlation between them.
These charts shows that basically the there is no causal relationship between gold and bitcoin, but RBC Capital Markets’ Chris Louney has detected a fledgling relationship between bitcoin prices and gold flows, the firm’s commodities analyst said Tuesday on CNBC’s “Futures Now. ” He said this:
“Towards the end of last year, we started to notice that correlation turned at least mildly negative,” Louney said. It coincided with bitcoin’s record breakout to nearly $20,000 in December. That’s when he also noticed Google search trends for the word “bitcoin” also surged.
“When we saw interest in bitcoin peak as measured by Google trends, that’s really when we saw this marginal negative relationship between gold and bitcoin develop,” he said.
Despite bitcoin’s black January in 2018 , Louney said, he hasn’t detected any changes to the relationship since the December peak. But he believes the correlation could eventually grow as bitcoin and cryptocurrency technology matures. (Source: cnbc.com)
- The three times where BTC and gold prices were practically the same were caused by different reasons (details are below each chart). That makes sense because they are very different from each other.
- When RBC Capital Markets found out the negative relation between gold and BTC was in the best historical moment of BTC since it’s creation, so, statistically it is an exception.
Published at Sun, 21 Jul 2019 14:38:27 +0000
Bitcoin Pic Of The Moment
By Halans on 2014-03-15 11:13:50
