As pointed out in a recent article by SEBA Bank, the correlation between the price of bitcoin and the trend of gold is getting closer and closer and for this reason, BTC could be defined as digital gold.
The article, titled “Bitcoin, gold and coronavirus”, highlights just how in this phase of crisis due to the coronavirus, BTC has followed the traditional markets and how it was proclaimed dead for the 380th time as the price fell 40% during the month of March alone.
Anyway, this trend following the traditional stock market is not frequent and this is the first time that this price correlation is reported: essentially, according to the bank, BTC never follows the trend of traditional markets like stocks, instead, it happens more and more often that it follows the price fluctuations of gold.
For these reasons, the research department of SEBA Bank explained that BTC is comparable to gold in the long run.
“Bitcoin is now experiencing its first global crisis. During the general run on liquidity, bitcoin fell more than other markets which were supported by governments and central banks. After the sell-off, the correlation has declined. This behaviour is similar to what we have observed with gold and S&P 500 during the dot-com bubble burst”.
The report compares BTC’s current performance with the three major crises that have hit gold in history, particularly Black Monday in 1987, the dot-com bubble in 2002 and the global crisis in 2008. In the three cases, gold had behaved differently but always as the asset of choice for diversification.
In any case, explains SEBA, blockchain technology continues to progress in its development and stablecoins are performing very well as “safe haven” assets against the uncertainty of all markets and because of the ease of selling and buying them.
“Both observations indicate that crypto is supported by a robust technology and is here to stay”.
Stablecoins have grown by more than 20% according to SEBA data, although in reality, since mid-February Tether USDT, like its gold-pegged version, have grown by almost 40%.