- BTC posted better growth than gold since the US banking crisis.
- BTC has shown increasing decoupling from gold in recent months.
Beset by the 2022 bear market phase, the world’s largest digital asset by market cap Bitcoin [BTC] saw a relief rally in 2023, resulting in a 50% year-to-date (YTD) price increase.
Notably, this bull run has increased its value against gold [XAU]. According to a June 14 tweet from on-chain analytics company Glassnode, it took 13.3 ounces of gold to buy a single Bitcoin, a significant 46% increase since the start of the year.
While this was still far from the peak BTC/XAU ratio of 37 reached during the 2021 bull market, compared to the Covid-19 low, it reflected a massive 430% growth.
Source: Glassnode
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Analyzing the price trajectories of the two assets YTD, it was revealed that the “digital gold” outperformed its real-world counterpart. While BTC, as mentioned above, made a 50% gain, gold has only managed a 6.4% jump since the start of 2023.
Source: Glassnode
To put things in perspective, Bitcoin’s growing value relative to gold meant the market could favor the digital asset over the precious metal as a hedge against inflation. This could reinforce BTC’s long-supported narrative as a safe haven.
A safe haven is an asset whose value is expected to remain stable or increase during periods of economic downturn. And BTC proved its mettle during the March US banking crisis, growing 21% since then. On the other hand, the yellow metal has only managed to grow by 4% since the turmoil.
However, given BTC’s reputation as a volatile asset, investors should take this development with a grain of salt. With the wider crypto market suffering from US regulatory animosities, BTC gains could be quickly reversed in 2023.
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Bitcoin and Gold remain isolated
In recent months, Bitcoin has shown increasing decoupling from gold. The BTC/XAU correlation fell to 0.17 on June 14, according to Glassnode data. This was a steep retrace of the multi-year highs seen in April.
It meant that Bitcoin was seen as an independent asset class with its own fundamentals rather than being affected by real-world headwinds.
Source: Glassnode