The correlation of Bitcoin with gold has sharply increased after February's "desynchronization".

The 30-day Pearson correlation coefficient between Bitcoin and gold reached 0.54, approaching a yearly high of 0.73. This may indicate a strengthening narrative of a safe-haven asset among investors, researchers at The Block noted.

The strengthening of interdependence occurred after the remarkable “unbinding” of the first cryptocurrency from the noble metal in February. During that time, the 30-day correlation collapsed from 0.73 to -0.67 over the course of three weeks.

At the beginning of February, Bitcoin was trading around $102,000, while an ounce of gold was priced at $2,800. By the end of the month, the first cryptocurrency had depreciated to $84,000, while the precious metal had increased in price to $2,850.

“This discrepancy led to a sharp decline in correlation, as Bitcoin fell by more than 17%, while gold rose by almost 2%,” analysts noted.

Since then, the correlation coefficient between the mentioned assets has significantly recovered, rising from -0.67 to 0.52. The likely reason for the “resumption of the tie”: “liberation duties”, contributing to increased macroeconomic uncertainty and a decline in the dollar index.

History repeats itself?

If we study historical patterns, the “reunion” of Bitcoin with gold can be considered a cyclical phenomenon. Experts from The Block have counted 18 instances since 2020 when the correlation coefficient between Bitcoin and gold fell below -0.50 or approached that mark.

In 17 episodes, the indicator recovered in just seven days. The only exception was December 2022, when it took a little over two weeks to return to its original values.

Historically, each time the correlation coefficient between Bitcoin and gold falls below -0.50, the cryptocurrency starts to “strongly tether” to the metal again. This process is often accompanied by an increase in correlation to 0.8 and above, after which the “untying” cycle resumes. Let us remind you that NYDIG researchers reported on the strengthening of Bitcoin as a safe-haven asset after the “Liberation Day” of U.S. President Donald Trump.