How Has Bitcoin Excel Compared to Gold?

As the US dollar continues to strengthen, the relationship between Bitcoin (BTC) and gold has reversed, weighing on both commodities, according to a blog post by institutional-level cryptocurrency market tracker Kaiko.

What Is Shaping the Market?

The connection between BTC and gold has often been between a negative 0.2 and a positive 0.2 from the previous year. However, things changed as the value of the US dollar rose. Due to the protracted conflict between Russia and Ukraine, gold lost all of its value in the first quarter of the year, causing a 10% drop for the year, according to Kaiko. The global tightening of monetary policy is also a contributing factor. The market tracker also views gold as a safe haven or asset seen as a store of value during a downturn.

Despite the overall selloff in September, the cryptocurrency market outperformed traditional assets in the third quarter. Data shows that activity on two of the nine exchanges, Bitstamp and Bitfinex, contributed to the record volume of the BTC-GBP pair last month. In particular, Bitfinex reported a total daily BTC-GBP trading volume of 42k BTC or £747k on 26 September. This was more than four times the previous greatest volume day value. A few cryptocurrency exchanges, like Kraken, Bitstamp, and FTX, also experienced an increase in the volume of their fiat trading services on the 26th, which reached record highs and persisted into the weekend.

A study from last week showed that major crypto outperformed stock market indices. The tech-heavy Nasdaq and the S&P 500 Index declined by more than 4% during t week, while Bitcoin (BTC) and Ethereum (ETH) saw gains of 2% and 4%, respectively.