- By 2023, bitcoin (BTC) will surpass gold and traditional assets.
- The collapse of the correlation between bitcoin and stock indices will continue, according to Grayscale.
Amid risks such as currency devaluation and military conflicts, bitcoin (BTC) has become “an alternative to physical gold,” according to investment firm Grayscale.
“The recent increase in its price probably reflects the growing demand for bitcoin assets as digital gold,” the company emphasized in a report.
The price of bitcoin reached USD 35,000 last week, the highest level in 17 months, a price that has been maintained until today. This is approximately double the price at which the year began, as reported by CriptoNoticias.
In addition to this, the appreciation of the digital currency is a sign of optimism about the possible approval of exchange-traded funds (ETF) to spot bitcoin in the United States.
Grayscale, one of the 12 companies that applied for bitcoin ETFs in the United States, highlighted it as an attribute of the digital currency that benefits from its use as “a non-sovereign monetary system and a digital alternative to gold.”
The increase in the price of bitcoin caused this week to reach the highest daily correlation with gold in seven months since the beginning of the banking crisis in the United States. The last time these assets were as correlated as they are now was when Silicon Valley Bank and Signature Bank failed in March. This can be translated as investors fleeing the stock market for commodities like bitcoin and gold.
Precisely, the Grayscale report highlights a correlation breakdown between bitcoin and stock indices, which, it seems, will continue. “October marked the third consecutive month of losses for the stock and bond markets,” he said. In the following picture, you can see how bitcoin had a better return than gold and the Nasdaq 100 between July and October of this year.
Since late July, the traditional stock and bond portfolio mix has lost about 8%. Bitcoin, on the other hand, saw a 29% increase in October, highlighting its value as a diversified, high-yield asset.
CriptoNoticias reported two days ago that the correlation between bitcoin and the Nasdaq 100 (NDX), the index that gathers the shares of the top one hundred companies listed on that American stock exchange, was also affected, falling into negative territory for the first time. in 3 months since July.
However, Grayscale believes that bitcoin is at a “crossroads”: “We believe that this decoupling can continue in the near term, due to the number of positive aspects specific to Bitcoin. However, if the global asset market continues to decline, it remains to be seen if cryptocurrencies will be able to maintain their recent gains.