The relationship between Bitcoin and gold has become the focus of research for analysts and investors as both reach record highs. Although they share the characteristic of preserving value against inflation and economic instability, their connection does not follow a simple or linear pattern. Recent studies show that before 2020, these two assets operated almost independently, but after a series of significant events, they began to exhibit mutual interaction.
From 2010 to October 2017, daily data chain analysis indicates that gold had a slight negative impact on Bitcoin. Threshold regression models estimated a negative coefficient (β ≈ –0.51) with limited predictive power, reinforcing the view that BTC was primarily a speculative asset, while gold maintained its role as a safe haven. The low correlation and scarcity of Granger causality during this period confirmed their independence.
A statistical change identified by parameter stability tests and CUSUM tests determined October 2017 as the turning point between the two markets. From that moment, the relationship shifted significantly from negative to positive (β ≈ +0.27), indicating a simultaneous increase in interest in gold and Bitcoin as alternative assets. This change reflected a transformation in the perception of Bitcoin, which began to attract investment capital due to its diversification potential and risk-bearing capacity.
The explosion of cryptocurrency acceptance by institutions in 2017 created the initial momentum. However, a study extending to 2024 shows that after 2020, the intensity of the relationship increased moderately. Impulse response functions reveal that a gold price shock causes a stronger reaction in BTC and vice versa, with longer-lasting impacts. Although the overall correlation remains near zero, causality tests suggest a weak influence from gold to Bitcoin, indicating an increasingly interdependent relationship due to global macroeconomic factors.
Both gold and Bitcoin respond to inflation, monetary policy changes, and global liquidation volatility. Interest rate tightening or monetary expansion affects the demand for both assets. Geopolitical tensions and risk aversion also exert simultaneous pressure. In an environment dominated by instability, the search for alternatives outside the traditional banking system enhances the role of these investments.
For investors allocating part of their portfolio to safe-haven assets or diversification, understanding this relationship is crucial. Bitcoin continues to show higher volatility and, unlike gold, lacks a long-standing history as a value store. However, its collective response to market events provides partial risk hedging opportunities. Maintaining balanced exposure, assessing the timing of structural breaks, and adjusting allocation according to economic cycles can enhance risk management.
The relationship between Bitcoin and gold is evolving towards greater integration while maintaining autonomous elements. The 2017 disruption marked the beginning of a positive link, consolidated after the pandemic. Moving forward, its development will depend on global policy changes and the maturation of the cryptocurrency market. Capturing these technical nuances will help investors and analysts better predict the interaction between these two assets in seeking safety and diversification.
Disclaimer: The article is for informational purposes only and is not investment advice. Investors should thoroughly research before making decisions. We are not responsible for your investment choices.
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