Key Takeaways
- • Bitcoin's 90-day rolling correlation with gold reached 55% in mid-September, the highest in Block Scholes' data going back to 2014, and stood at 51% at the time of the note, according to Block Scholes research analyst Thahbib Rahman.
- • BTC's 90-day correlation with the S&P 500 and Nasdaq-100 remains positive at about 40% but has fallen from a 62% high in February, and since mid-August Bitcoin has been more closely correlated with gold than with US equities for the first time since late 2020.
- • The shift followed the US Treasury's expanded bond buyback programme in August, after which BTC posted its largest weekly gain since March 2024, rallying more than 20%, while gold rose 5% in the same week.
- • Gold was trading above $4,100 an ounce, with persistent inflation and hawkish monetary policy cited as headwinds.
Summary
Bitcoin is increasingly trading in step with gold as investors seek hedges against currency debasement and broader market risk, according to a note published Thursday by Thahbib Rahman, Research Analyst at Block Scholes, as reported by Kitco News. Rahman said Bitcoin's correlation with gold is at its highest level since November 2020, a period marked by pandemic-era fiscal and monetary stimulus.
Rahman traced the move to June, when the 90-day rolling correlation began rising, and to August, when the US Treasury stepped up its bond buyback programme in an attempt to cap longer-dated Treasury yields. In the week following that announcement, BTC rallied more than 20%, its largest weekly gain since March 2024, while gold rose 5%. The correlation peaked at 55% in mid-September, the highest in Block Scholes' data going back to 2014, and was at 51% at the time of the note.
The analysis places the trend within the broader debasement trade, as global sovereign debt rises at what Rahman described as an unsustainable pace and persistent inflation erodes fiat purchasing power. Gold, which had pushed back above $4,100 an ounce, continues to face headwinds from inflation fears that are driving hawkish monetary policy globally.
Rahman also noted that Bitcoin's relationship with US equities has weakened. The 90-day correlation with the S&P 500 and Nasdaq-100 is still positive at around 40%, down from a 62% high in February. He said this could be an early sign that markets are beginning to treat BTC as a supplementary hedge alongside gold in the current macro-driven environment, though the note presents this as an early signal rather than a settled conclusion.
Rahman traced the move to June, when the 90-day rolling correlation began rising, and to August, when the US Treasury stepped up its bond buyback programme in an attempt to cap longer-dated Treasury yields. In the week following that announcement, BTC rallied more than 20%, its largest weekly gain since March 2024, while gold rose 5%. The correlation peaked at 55% in mid-September, the highest in Block Scholes' data going back to 2014, and was at 51% at the time of the note.
The analysis places the trend within the broader debasement trade, as global sovereign debt rises at what Rahman described as an unsustainable pace and persistent inflation erodes fiat purchasing power. Gold, which had pushed back above $4,100 an ounce, continues to face headwinds from inflation fears that are driving hawkish monetary policy globally.
Rahman also noted that Bitcoin's relationship with US equities has weakened. The 90-day correlation with the S&P 500 and Nasdaq-100 is still positive at around 40%, down from a 62% high in February. He said this could be an early sign that markets are beginning to treat BTC as a supplementary hedge alongside gold in the current macro-driven environment, though the note presents this as an early signal rather than a settled conclusion.
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