BTC-gold correlation rebounds sharply after February's 'decoupling' collapse, echoing historic cycles
Quick Take
- Bitcoin’s 30-day Pearson correlation to gold has sharply rebounded from -0.67 in February to 0.54 in late April, driven by renewed macroeconomic uncertainty and market reactions to U.S. tariffs and political events.
- The following is an excerpt from The Block’s Data and Insights newsletter.
The 30-day Pearson correlation of BTC against gold stood at 0.54 on Friday, April 25, as it approached its yearly high of 0.73. This comes after a notable episode of Bitcoin "decoupling" from gold in February, when the 30-day Pearson correlation collapsed from 0.73 to -0.67 in just three weeks.
At the beginning of February, the price of BTC was around $102,000, while the price of an ounce of gold was $2,800. By the end of February, the price of BTC had fallen to $84,000, while the price of gold rose to $2,850 per ounce. This discrepancy led to a sharp drop in correlation, where BTC fell by more than 17% while gold rose by nearly 2%.
Since then, the Pearson correlation of BTC to gold has staged a sharp rebound, rising from -0.67 to 0.52. A large part of this "recoupling" is likely due to the tariffs imposed by the U.S. on various countries, fueling broader macroeconomic uncertainty.
This renewed uncertainty helped reignite Bitcoin’s long-standing narrative as "digital gold," as BTC prices surged over 10% following President Donald Trump’s so-called "Liberation Day" announcement. Meanwhile, gold prices also climbed over 5% during the same period. Conversely, the U.S. Dollar index has fallen by approximately 4% since "liberation day," further strengthening the relative appeal of both Bitcoin and gold.
However, when looking at this figure's historical patterns, the "recoupling" of Bitcoin to gold can be attributed to a cyclical phenomenon. Since 2020, there have been 18 separate instances where Bitcoin’s Pearson correlation to gold approached or fell below -0.50. In 17 of those instances, the correlation snapped back within just a week. The sole exception occurred during December 2022, when it took just over two weeks for the correlation to revert.
Historically, every time this figure plunges to an extreme of -0.50 or lower, Bitcoin’s correlation with gold subsequently "recouples" strongly, often rising back to 0.8 or higher, before eventually beginning the “decoupling” cycle anew.
This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.
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