Over the past 90 days, we have observed a significant deviation from traditional patterns. Bitcoin’s ties with both Ethereum and gold have significantly weakened, suggesting a new direction in the dynamics of the cryptocurrency market.
Since its inception, Bitcoin has often been compared to key assets like US stocks, mirroring their behavior in the post-Covid-19 pandemic era. Many observers likened it to gold, especially after the banking crisis in March, coining the term “digital gold” [https://www.investopedia.com/bitcoin-as-digital-gold-5090576].
However, the latest data presents a completely different picture. While US stock markets are rising, the price of Bitcoin remains relatively stable. Over the last 90 days, the correlation coefficient of Bitcoin to gold is -0.53, which represents the second-lowest value in recent years. Only once before was such a low correlation recorded – during the collapse of FTX, which temporarily lowered the price of Bitcoin [https://cointelegraph.com/news/bitcoin-correlation-with-traditional-assets-nears-record-lows].
At the same time, the correlation of Ethereum with Bitcoin, which has been at 0.89 since January 2020, indicates that Ethereum’s higher volatility is also decreasing. Over the last 90 days, the correlation coefficient between these two cryptocurrencies has been gradually declining, reaching values not seen since September 2022 [https://cryptoslate.com/ethereum-and-bitcoin-correlation-dynamics].
These latest trends suggest that Bitcoin is moving towards its own independent trading path. This could signify a new era in the dynamics of the cryptocurrency market, where Bitcoin not only breaks away from previous comparisons to gold or other assets but also confirms its position as the market leader. Bitcoin’s increasing independence from traditional trends may attract new investors looking for alternative ways to diversify their portfolios. Only time will tell if this trend will last and what benefits it will bring to the global financial market.
