Some news sources like to make comparisons between the price action of Bitcoin (BTC) and other assets. In particular, the two most commonly compared asset classes are gold and tech stocks.
As long as a correlation holds, it tends to be a big news story. Throughout 2022 and early 2023, for example, “Bitcoin trades in tandem with tech stocks” is widespread. Since the correlation has broken down, however, there doesn’t seem to be much relevant news coverage.
Now a new narrative is taking the spotlight: Bitcoin’s correlation with gold. Since the failures of Silvergate, Signature Bank, and Silicon Valley Bank in March, both assets have rallied. Both of these accounts make sense above. If Bitcoin is seen as a speculative asset, then it can be traded similar to a tech stock. And if Bitcoin is more than a safe-haven asset, a correlation with gold seems reasonable.
It is important to note, however, that correlations may come and go. Just because two assets share a correlation at one time does not always mean they will have a place in the market for the long term. And when zooming out to larger timeframes, it becomes possible to rule out correlations of any kind.
Let’s examine both of these correlations on a year-to-year basis and see if there is any merit to them.
Bitcoin, gold and NASDAQ: a one-year correlation analysis
Year-to-date, Bitcoin has gained nearly 58%, rising from $16,600 at the start of the year to over $26,000 today. In the same timeframe, the NASDAQ gained about 36%, rising from 11,000 to just shy of 15,000.
On the other hand, gold is only up 7% YTD.

According to the 90-day correlation coefficient, BTC is positively correlated with gold (0.58) and negatively correlated with tech stocks (-0.65) today. For most of this year, BTC has had a high correlation with both assets. At the beginning of the year, the correlation of gold was very negative, while the correlation of tech stocks was just below neutral.
So, what is it? Safe-haven correlation or risk asset correlation? Or does the presence of multiple correlations point to no correlation? Does the same price action on an annual basis constitute a significant relationship between the two assets in the first place?
Such a discussion can be very long. These questions are best interpreted on a rhetorical basis, ie, they mean that there are any number of assets that have the same price action patterns on a one-year chart.
When looking at the question in terms of percentage gains, things look even more different: gold rose 9%, while Bitcoin rose 18% and the NASDAQ 30%.
It would be nice if we could glean some meaning from the fact that Bitcoin tends to be correlated with equities at some point now and then. But so far this year, the relationship between the two has remained steady throughout the banking crisis that began in March and led to a massive rally for BTC. Since then, the relationship has faded, as the NASDAQ has rallied to YTD highs and BTC has mostly traded sideways.
In the long timeline, everything is broken
Over the past 14 years, Bitcoin has risen against the US dollar by tens of millions of percentage points. There are few asset classes that can boast similar returns. Other properties also do not carry the same level of volatility, making a long-term correlation less likely.

To date, gold has risen from $800 in early 2009 to $1,945 today, a gain of nearly 150%.

The NASDAQ is up more than 10x since early 2009, or has returned more than 1,000%. Nice gains, but a far cry from the 52,000,000% Bitcoin has returned from July 2010 to date.

The key takeaways here are:
- An asset that appreciates more than 50,000,000% over its lifetime may not be linked to others.
- Correlations between Bitcoin, gold, and tech stocks are usually invisible on timeframes longer than a year or two.
- Due in large part to the previous two points, the correlations are not very significant.
Investors do well to keep this in mind when interpreting the markets. Banking on any specific correlation as part of a strategy can be risky, because that correlation can break at any time.
This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.