Recent studies challenge the traditional notion of Bitcoin as 'digital gold'. New data indicates a shift in its correlation with technology markets.
Bitcoin and Its Connection to Tech Stocks
According to the Franklin Templeton Digital Assets report, Bitcoin's correlation with tech-heavy indices like Nasdaq reaches 0.7, suggesting a strong positive association. In contrast, its correlation with gold seldom exceeds 0.3.
Reasons for Bitcoin's Changing Correlation
Several factors contribute to this shift: the perception of Bitcoin as a risk-on asset, institutional investment flows into cryptocurrencies, its link to technological innovations, and macroeconomic factors.
Bitcoin and Gold: Two Different Assets in Uncertain Times
Although the correlation between Bitcoin and gold may be weak, their reactions to specific global events highlight clear differences. For instance, Bitcoin's recent price surge was fueled by positive economic indicators, while gold rose amid geopolitical instability.
The findings from Franklin Templeton offer a new perspective on Bitcoin's role in investment portfolios. Investors should reassess their strategies, considering Bitcoin's growing correlation with tech assets rather than gold.
