- André Dragosch, Bitwise’s head of research in Europe, said bitcoin is increasingly behaving like digital gold as its three-month rolling correlation with gold reached the highest level in nearly six years.
- Dragosch said the shift matters because investors may increasingly use both assets to hedge against currency-debasement risks during major economic changes.
- During the recent rally, bitcoin gained 22.4% over the week and gold rose about 5%, while the stock market declined, according to Dragosch.
Bitcoin is increasingly behaving like digital gold, André Dragosch, Bitwise’s head of research in Europe, said. According to Dragosch, the three-month rolling correlation between bitcoin and gold has reached its highest level since 2020, challenging the view that bitcoin is purely a risky technology asset.
Bitcoin and gold move more closely
Dragosch described August as an important month for macro markets. Against a backdrop of rising yields on 10- and 30-year U.S. Treasuries, Treasury Secretary Scott Bessent stepped into the market to increase purchases of long-term bonds, he said.
Bitcoin subsequently posted its largest weekly gain since March 2024, rising 22.4%. Gold gained about 5% over the same period, while the stock market fell, according to Dragosch.
The previous instance of such a high correlation between bitcoin and gold occurred in 2020, following massive fiscal and monetary stimulus during the COVID-19 pandemic, Dragosch said. He emphasized that both periods of significant government intervention in the macroeconomic environment coincided with a strengthening of the relationship between the two assets.
Meanwhile, bitcoin’s correlation with the stock market fell to its lowest level in a year, indicating a divergence between bitcoin and equities, according to Dragosch.
He also pointed to a significantly negative correlation between bitcoin and the U.S. Dollar Index, or DXY. Dragosch said this relationship means that factors putting pressure on the dollar can support bitcoin and gold at the same time.
The data were published by Bitwise.
Bitcoin could become an alternative to gold
Dragosch stressed that bitcoin and gold are not the same assets. Gold has served as a store of value for millennia, while bitcoin has existed for less than 20 years.
The assets can perform very differently when macroeconomic factors recede into the background, he said. During major economic shifts, however, investors may use them together to hedge against the risk of currency debasement.
Dragosch valued the gold market at around $30 trillion and said it is shaped by central banks, sovereign institutions and large capital allocators. That pool of capital far exceeds the venture and crypto capital that largely drove bitcoin’s price during its early years, he said.
If bitcoin continues moving away from the risk-asset category and toward assets used to hedge against currency debasement, the shift could reshape demand for the leading cryptocurrency, according to Dragosch.
Dragosch said bitcoin spent its first 15 years primarily as a risk asset. If its current correlation with gold persists, he said, the next 15 years could bring a different demand structure.
Separately, CZ previously said bitcoin could overtake gold during the next bull market.
Source: Incrypted
