A recent report from Franklin Templeton Digital Assets casts doubt on the long-held belief that Bitcoin acts as 'digital gold.' The study reveals that its market behavior is more in line with technology stocks than traditional safe-haven assets like gold.
Minimal Correlation Between Bitcoin and Gold
The report titled 'When Gold Zigged, Bitcoin Moonwalked' dives into three years of price data and finds a consistently weak correlation between Bitcoin and gold. Over rolling 90-day windows, the correlation rarely rose above 0.3, indicating that the two assets tend to move independently. 'In fact, if we regress BTC returns over the last 3 years against returns of a long-gold strategy, we find that the p-value is 0.28, meaning there is no statistically significant correlation between the two assets,' the report states.
Tech-Driven Movement More Likely
In contrast to its limited association with gold, Bitcoin’s correlation with the Nasdaq Composite—a tech-heavy stock index—has been far stronger, at times peaking near 0.7. This suggests that Bitcoin’s price action is more aligned with tech equities, influenced by innovation, market sentiment, and investor risk appetite. The report explains that gold’s long-standing institutional credibility, deep liquidity, and centuries-old market structure set it apart from Bitcoin, which remains a relatively young and volatile asset.
Market Reactions Show Bitcoin’s Sensitivity to Macro Trends
Recent price activity further supports Franklin Templeton’s analysis. Bitcoin surged above $83,000 following lower-than-expected US Producer Price Index (PPI) data, which came in at 2.7% against a forecast of 3.3%. The drop in inflation metrics and a weaker US dollar helped boost sentiment among crypto traders. Despite the favorable inflation data, traditional stock indices like the S&P 500 and Nasdaq remained largely unchanged, reflecting continued investor caution amid escalating US-China trade tensions.
The report illustrates that Bitcoin not only does not find significant support from traditional safe-haven assets, but its dynamics are more influenced by technological trends and macroeconomic news. This raises questions about the accuracy of labeling Bitcoin as 'digital gold.'
