Bitcoin looks soft in the era of hard assets to hedge inflation

Bloomberg/Joanna Ossinger/4-18-2022

“Bitcoin’s negative correlation with commodity markets is providing more fodder for critics of its suitability as a hedge for inflation. A 50-day correlation coefficient for Bitcoin and gold is around minus 0.4, the lowest since 2018…”

USAGOLD note: Bloomberg hits on an observation we have consistently passed along at USAGOLD. Bitcoin acts more like a tech stock than it does a safe haven. Its negative correlation to gold speaks volumes. Year to date, gold is up over 10.5% and bitcoin is down over 28%. That aside, we find it remarkable how quickly we have gone from talking about rising prices as “transitory” to an “era” of inflation. “[I]nvestors are choosing tradition over a new frontier. Gold has been an inflation hedge for millennia,” says Oanda Asia-Pacific’s Jeffrey Halley.

Gold and bitcoin price performance
(%, Year-to-date)

Chart courtesy of TradingView.com