The value of gold reached a record peak after comments from US President Donald Trump regarding inflation on his social media platform, while Bitcoin experienced a downturn on Monday, exemplifying what some might call Bitcoin’s “split personality.”
According to IG market analyst Tony Sycamore, there has been a notable correlation between gold, Bitcoin, and the Nasdaq over the past two and a half years, with all three assets experiencing significant gains, as reported by Cointelegraph.
“Recently, however, the correlation between gold and Bitcoin has weakened, which is not unusual for brief periods and is attributed to Bitcoin’s split personality.”
“At times, Bitcoin is regarded as a safe haven or a store of value, and at other times, it’s seen as a risky asset,” he further explained.
On Monday, the price of gold surged to its highest-ever level of $3,485 per ounce following a 1% increase, according to GoldPrice. This price increase coincided with Trump’s post on Truth Social, where he claimed, “prices are ‘WAY DOWN’ in the USA, with virtually no inflation.”
In contrast, Bitcoin (BTC) has dropped to its lowest level since early July, marking a divergent pattern.
On Monday morning, it reached a two-month low of $107,290 on Coinbase, according to TradingView. This decline marks its steepest correction from the mid-August all-time high, with a pullback exceeding 13%.
Questioning Bitcoin-Gold Correlation
“Currently, Bitcoin and gold aren’t moving in tandem,” stated Vince Yang, co-founder of Ethereum layer-2 platform zkLink, in conversation with Cointelegraph.
“The correlation has been relatively low, and even negative at times this year. While gold remains the traditional ‘safe-haven’ asset, Bitcoin is more influenced by liquidity and market risk,” he noted. “Effectively, they seem to offset each other rather than move together.”
Nonetheless, Sycamore believes the relationship between Bitcoin and gold could realign in the future, as it has in the past.
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“Looking at the bigger picture, I believe if Trump aims to drive the economy aggressively and the Fed lowers rates amidst ongoing inflation, Bitcoin’s correlation with gold will reestablish itself, and both will rise,” he remarked.
“The key question is at what level Bitcoin will find its footing,” he concluded.
Bitcoin May Simply Be Lagging Behind Gold
Meanwhile, historical data indicates that Bitcoin tends to experience price rallies within 150 days following gold reaching new all-time highs.
Gold prices surpassed $2,000 in 2020 during the pandemic, preceding Bitcoin’s surge to an all-time high the subsequent year.
Earlier this year, Joe Consorti, head of growth at Theya, mentioned that Bitcoin follows gold’s trend with a lag of about 100-150 days at times.
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