- Bitcoin has had a negative correlation with the dollar since the COVID-19 crash.
- The market’s trend since September reveals that investors have favored Bitcoin over gold.
- Bitcoin allocations by companies like Tesla threatens the reserve currency status of the greenback, according to some analysts.
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According to CNBC’s Dan Nathan, the U.S. government will try to curb the hype if it starts to see Bitcoin as a threat to the dollar.
However, the faster companies and wealth managers adopt, the more difficult it will become for the government to intervene.
Bitcoin Eats Into Gold ETF Market Share
In hindsight, Elon Musk’s consistent tweets about Dogecoin may have been a hint about Tesla’s BTC purchase. Now, while Bitcoin enthusiasts await the next significant corporate investment, the conversion of cash balances to BTC may have more significant implications than its proposition as an inflationary hedge.
The people have spoken … https://t.co/x41oVMzTGo
— Elon Musk (@elonmusk) February 8, 2021
Gold topped out at $2,075 per ounce on Aug. 7 last year. Since then, BTC has gained 320% to the peak of $48,200 yesterday, while gold has been in a downtrend.
We have a 180 degree reversal in correlation to Gold.
Green dot is MicroStrategy’s first purchase of Bitcoin. pic.twitter.com/gTglGcavOg
— Willy Woo (@woonomic) February 9, 2021
Bitcoin and gold have followed a negative correlation with the dollar index since the COVID-19 crash.
The 90-day Spearman correlation for BTC with the dollar dropped to negative 0.36 alongside gold. The downside in the greenback has favored Bitcoin’s rise for a long time.
In October last year, JP Morgan’s analyst found Grayscale GBTC investment has beaten gold ETF allocation since 2019. They also predicted that Bitcoin’s value could appreciate ten times when compared with gold.
Cash reserve allocation to BTC, like…