Bitcoin may be emerging as a superior hard asset compared to gold, according to a recent correlation study analyzing market dynamics amid growing fiscal concerns.
Fiscal Worries Drive Hard Asset Rally
Both Bitcoin and gold have been rising in tandem as concerns about the fiscal health of advanced-economy governments dominate market sentiment. These worries are pushing bond yields—or market-implied borrowing costs—higher across the board.
Bitcoin-Gold Correlation Hits Multi-Year High
As of today, the 90-day correlation coefficient between Bitcoin and gold’s daily returns stands at 0.59, according to data from TradingView and CoinDesk. This marks the highest level since 2020, when central banks and governments deployed massive monetary stimulus to cushion economies during the pandemic.
Why Bitcoin Holds a Slight Edge
While both assets are viewed as hard assets that benefit from fiscal worries and the prospect of financial repression, Bitcoin appears to have a slight advantage. The key differentiator lies in each asset’s relationship with the U.S. 10-year Treasury yield—the benchmark borrowing cost that influences credit conditions across the economy.
Rising bond yields typically create headwinds for non-yielding assets like gold and Bitcoin, which generate no cash flow while sitting in investors’ portfolios. However, Bitcoin’s correlation with the 10-year yield is negligibly negative and notably weaker than gold’s, suggesting it may be less sensitive to interest rate pressure.
For more analysis on this signal, check Today’s Signal.
