What’s tying together Bitcoin, gold and stocks?

Bitcoin correlations report, July 2024

If you zoom away from the day to day movements of the major asset classes you can see the big trend. 

That trend is tying together Bitcoin, gold and the leading companies that weigh so much in the stock market. And it is dragging everything else that goes downstream. 

This is the big picture we ought to focus on.

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What’s tying together Bitcoin, gold and stocks?

The takeaway

Instead of looking at short term correlations, this week we are zooming out. And when we look at the big picture, here is what we learn:

• Bitcoin's price trends are closely correlated with gold and the NASDAQ over long-term horizons, driven by global liquidity conditions.

• Many crypto assets, miners, and related stocks follow Bitcoin's lead. Investing in these assets is essentially betting on Bitcoin's direction.

• Financial conditions in the US are easing, creating a favourable environment for Bitcoin and related assets.

• The current liquidity tailwind supports Bitcoin, but a potential US recession remains a key risk to watch.

• Understanding these long-term trends and macro correlations is crucial for navigating the crypto market effectively.

Zooming out on macro correlations