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Like Bitcoin, gold has performed extremely well since the start of 2020. The two assets are up by approximately 26% and 22%, respectively.
Both seem to be benefiting from the influx of money printing done by central banks around the world.
With gold primed to rally further according to technical and fundamental analysts, BTC may benefit as the correlation between the two markets spike.
Gold has been on an absolute tear since the start of the year, especially considering it is a $10 trillion market. According to data from TradingView, the price of an ounce of the precious metal has literally grown by 22% since the start of 2020.
With such strength, analysts say that gold is primed to move higher. And analysts say that Bitcoin stands to benefit.
Gold Seems Poised to Move Higher — And So Does Bitcoin
According to the CIO of Adamant Capital, Tuur Demeester, there’s a good likelihood gold is in the early innings of a macro bull market:
“Gold near all time highs, resistance at $1800? Silver may be on the cusp of breaking out of its long term channel (though in gold terms, it’s still in a down trend). HUI Gold Mining Index: in gold terms we’ve likely seen a double bottom, now early start of a bull market.”
Chart of gold’s price action over the past two decades from Tuur Demeester
He’s far from the only one that thinks so.
The chief executive of Galaxy Digital, Bitcoin bull Mike Novogratz, told CNBC earlier this month that the precious metal could eclipse $2,000 per ounce shortly. He cited the vast amount of money printing by central banks, which boosts the value proposition of a scarce asset like gold.
Gold’s strength could act as a boon for growth in the Bitcoin and digital asset market.
Bloomberg senior commodity analyst Mike McGlone said in a June report that the correlation between the two markets has risen to all-time highs:
“Increasing companionship with gold is a Bitcoin-price tailwind, in our view. At the highest-for-longest 52-week correlation and beta ever vs. the metal, the first-born crypto should continue to advance for reasons similar to gold, fueled by unprecedented global central-bank easing. Our graphic shows the Bitcoin-to-gold beta near 2x and the metal advancing toward an eight-year high.”
Other analysts, too, have noted strong correlations between the markets.
Macro Investors Are Taking Note
Macro investors are taking note of this correlation and narrative of how Bitcoin is like gold. And, in wins for bulls, they’re increasingly becoming supportive of the cryptocurrency.
Just last week, macro investor and strategist Lyn Alden revealed she has three reasons why she thinks Bitcoin will gain strength in the next two years. She did not convey a price prediction, but noted that the asset’s network effects, scarcity mechanisms, and value proposition currently lends to a rally.
Alden’s support for Bitcoin comes shortly after hedge fund manager Paul Tudor Jones said he sees Bitcoin as the “fastest horse in the race.”
Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Gold Is At the "Early Start" of a Bull Market — and Bitcoin Can Benefit
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.