The correlation between the leading cryptocurrency and gold has dropped to an 11-month low of -0.36, as noted by K33 Research, reports The Block.
The divergence emerged following Donald Trump’s victory in the presidential elections. Since then, Bitcoin has risen by 20% to new ATH, while the precious metal has fallen by 5% amid rising US Treasury yields and a strengthening dollar.
QCP Capital noted that the leading cryptocurrency is gaining momentum as digital gold. This trend appears “increasingly structural” due to the reallocation of capital from traditional safe havens.
Asia Colour — 12 Nov 24
1/ Since the election, #Gold has dropped 5%, while #Bitcoin has surged 30%, signaling a shift as BTC gains traction as “digital gold.” This isn’t just a short-term trend — it’s a structural movement as capital reallocates from traditional safe havens like…
— QCP (@QCPgroup) November 12, 2024
The combined market value of Bitcoin at $1.73 trillion has surpassed that of silver, yet it still lags behind the yellow metal, valued at $17.5 trillion.
According to their analysis, even a small capital reallocation—just 1% of gold reserves into the leading cryptocurrency—could elevate the digital asset’s price to nearly $97,000.
Experts noted increased interest in call options with strikes at $110,000 and $120,000, indicating “preparation for further breakthroughs.”
In October, BlackRock CEO Larry Fink acknowledged that Bitcoin is already a viable alternative to gold, and this acceptance is set to expand.
Earlier, billionaire and Social Capital founder Chamath Palihapitiya stated that the leading cryptocurrency is solidifying its status as a safe-haven asset and has the potential to displace precious metals.