People have long compared gold and bitcoin as ways to store value, but new data shows an interesting link between the two. Unlike most metals, which move at the same rate as Bitcoin, gold moves ahead of Bitcoin’s price by about 65 days. Over time this link has grown stronger, giving investors helpful information about how Bitcoin’s price will move in the future. However, gold prices can show more prominent trends, but their daily changes have little to do with Bitcoin, which makes it harder to make short-term forecasts.
Gold Leads Bitcoin 65 Days
The 65-day lead effect is one of the most interesting things about the gold-bitcoin link. Based on past data, Bitcoin prices have changed similarly in the two months after gold prices changed significantly. Gold is different from other metals because it moves in a way that isn’t like other metals, which tend to move with Bitcoin instead of before it. Gold’s price changes can help investors looking at this trend get a sense of where Bitcoin will likely go in the future.
Stronger Correlation Over Time
Since 2020, the link between gold and Bitcoin has grown more substantially. The two assets are linked strongly, as the 65-day correlation has hit 0.82 over the last four years. Even more surprising is that this connection has grown to 0.907 in just two years, showing that Bitcoin’s price changes are increasingly tied to gold’s past performance. This ever-increasing link shows that the way markets work is changing, and gold is a handy tool for Bitcoin investors to use to predict the future.
Trend Prediction, Not Daily Volatility
Gold can accurately predict the long-term trends in Bitcoin’s price, but its daily percentage changes have almost nothing to do with Bitcoin’s short-term changes. This means that gold is a good way to predict the long term, but it doesn’t tell us how Bitcoin will change daily. Traders who want to make money quickly might not benefit from this link, but investors looking at the long term can use gold’s success to determine where Bitcoin will go.
Conclusion
There is a strong trend that buyers can’t ignore: the link between gold and Bitcoin. Gold’s performance can help you make predictions because it moves ahead of Bitcoin’s price by 65 days and strengthens the connection between them.
