Bitcoin (BTC) rose this week to $11,392, its highest 2020 level, while its correlation with gold also increased. The correlation between monthly Bitcoin and gold in daily yields is currently at 0.66 points, according to CryptoCompare.
Korea began to rise as gold rose to $1,900 before falling out with Bitcoin.
While the correlation between gold and Bitcoin increased, Ether‘s (ETH) relationship with Bitcoin fell to 0.56 points.
Cryptocompare analyst James Li said in a statement to the press:
“With defi‘s enthusiasm and innovations, we have seen prices begin to divide in the crypto space. Ethereum has shown a much stronger increase in the past few weeks along with other DeFi tokens. ”
Is correlation with gold a good sign?
The correlation of Bitcoin with the precious metal often called “digital gold” could strengthen the cryptocurrency position as a means of holding value as the US Central Bank prepares to pass another coronavirus stimulus package.
Li suggested that although previous correlations between Bitcoin and gold have led to an increase in the price of Bitcoin, the situation has now changed:
“Bitcoin last had an average correlation with gold towards the end of 2018. Bitcoin had a 50 percent price drop in November 2018 and surged in the immediate aftermath. Gold recovered from a cyclical decline a few months ago. The correlation was a kind of coincidence. ”