Bitcoin behaved more like one of the world’s most historic currencies in March, as the largest cryptocurrency by market cap exhibited a strong correlation to gold.

The value of the two assets moved in similar directions throughout the month, edging higher as a banking crisis reared its head in the U.S. and toppled several institutions like Silicon Valley Bank—which eventually spilled over to shutter European giants like Credit Suisse.

The correlation between Bitcoin and gold currently stands around 50%, according to blockchain analytics firm Kaiko. It represents the strongest connection between the two assets in more than a year, Kaiko analyst Dessislava Aubert told Decrypt.

“It's a significant shift because over the course of 2022 Bitcoin and gold were mostly uncorrelated,” she said. “So, it was not moving as a safe haven [asset] at all.”


Over the past month, Bitcoin has rallied 25% to around $28,000, notching its third positive month in a row despite regulatory headwinds. Meanwhile, gold has risen over 8% during the past month, nearing an all-time high of`$1,988 per troy ounce on Monday.

Cryptocurrencies aren’t typically viewed as a safe haven asset—they’re generally seen as risky investments like stocks. And these risk assets have been hammered over the past year as the Federal Reserve has aggressively raised interest rates to quell inflation.

But Aubert said it’s possible for Bitcoin’s status as a risk asset to shift somewhat as investors’ perceptions of its strengths as a store of value change.

“For now, people are trying to put Bitcoin in a very traditional framework,” Aubert said. “It’s very hard because it can be a lot of things.” 


Meanwhile, the correlation between Bitcoin and the S&P 500—a major index often used to gauge movements in the U.S. stock market—fell significantly in March to 20%, adding on to a trend that’s been building for months, said Aubert.

“Bitcoin’s correlation with equities has been going down since December, steadily, and it's now very low,” she said, adding that 20% is essentially negligible.

However, Aubert said that Bitcoin will remain influenced by factors that also impact stocks, such as the Fed’s monetary policy. She also noted that Bitcoin is sensitive to changes in liquidity overall.

As Bitcoin begins to behave more like a safe haven asset and less like a risky one, there are some fundamental similarities between Bitcoin and gold that are notable, CoinShares’ Head of Research James Butterfill told Decrypt.

One element that the two assets have in common is that a finite supply supports their value, he said. Similar to how there’s a limited amount of accessible gold in the world, Bitcoin’s supply is capped at 21 million—with the last Bitcoin expected to be mined sometime in 2140, according to projections.

“Bitcoin, in fact, is technically a harder asset than gold because it's a finite supply, but [also] a very well-known finite supply,” Butterfill said. “Theoretically, you could go out into the universe and find a ton of gold, bring it back to Earth, and flood the market.”

In terms of the cultural overlap between Bitcoin and gold, perhaps there is evidence to suggest they are converging on that front as well. 

The California-based rapper Snoop Dogg stepped into the ring at WrestleMania 39 yesterday and was seen sporting a golden hardware wallet like an expensive chain.


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