Bitcoin-gold correlation increases as BTC follows gold’s path to store of value

Bitcoin’s correlation with gold is increasing as both assets strengthen their reputations as hedges against macroeconomic uncertainty, according to CryptoQuant CEO Ki Young Ju.

In a Tuesday post on X, Ju noted that the BTC–gold correlation has risen sharply alongside gold’s surge to new all-time highs. “Gold keeps hitting new ATHs. BTC–gold correlation is high; digital gold narrative still alive. Inflation hedge demand isn’t dead yet,” he wrote.

According to data from CryptoQuant, the BTC-gold correlation currently stands above 0.85, up from -0.8 in October 2021. The correlation previously reached an all-time high (ATH) of around 0.9 in April last year.

BTC-gold correlation rises. Source: Ki Young Ju

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Bitcoin follows gold’s path

According to Andrei Grachev, managing partner at DWF Labs, the correlation also shows how institutional investors perceive Bitcoin (BTC). “Capital naturally rotates into assets perceived as stable stores of value,” he said.

Grachev compared Bitcoin’s trajectory to gold’s own history, which transitioned from an active currency into a store of wealth. “It was once actively used as currency before becoming primarily a store of value. Bitcoin appears to be following a similar trajectory, which explains why its price movements increasingly echo gold’s dynamics,” he said.

Ben Elvidge, head of commercial applications at Trilitech and product lead for Uranium.io, said Bitcoin currently has more utility as a store of value than a means of transfer due to its programmatic scarcity. “This is because its capital appreciation potential has outweighed its ease of transfer for payments,” he said.

Related: What Central Bank Gold Buying Means For Bitcoin

Gold, silver surge to new highs

On Tuesday, gold prices surged to an all-time high of $4,179.48 per ounce. Spot gold rose 0.5% to $4,128.49, while US gold futures for December delivery climbed to $4,158. The metal has already gained 57% this year, driven by geopolitical risks.

Silver also hit a record high of $53.60 before easing to $52.27, extending its yearly gain to over 85%, outpacing gold’s rally.

The surge in gold and silver comes as financial institutions are increasingly embracing the “debasement trade,” investing in assets that hedge against the loss of purchasing power from continuous money printing.

Last week, entrepreneur Anthony Pompliano said institutions now recognize that “no one is ever going to stop printing money,” driving demand for hard assets.

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