The correlation between digital gold Bitcoin and physical gold has reached four months’ highest value. As investors’ belief over Fed has decreased, they are looking for more safe-haven assets including Bitcoin and gold.

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The US bonds market is plunging amid high purchasing of bonds on the part of Fed. The 10-year Treasury real yield plummeted to its lows witnessed in 2012, at 0.9 percent. It was hovering at a good position at the start of the year but the onset of Coronavirus pandemic and the Fed’s response has caused the bond market to go down.

While ignoring non-riskier assets- including bonds- the investors are looking towards stocks, gold, and even Bitcoin. That’s why Bitcoin is performing similar to gold.

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Four Months High Value

Crypto analytical firm Skew finds out that Bitcoin correlation with gold reached four months’ high value. On April 27, the correlation between both assets witnessed -42.8% but now it has reached 40.4 percent.

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The correlation of the leading asset with gold surged high after its correlation with the S&P 500 plummeted and reached 42%.

The rising number of Coronavirus cases has put a lot of pressure on the US equity markets in recent months. And the tension created between the US and China also has negative effects over traditional markets.

Prominent economist Stephen Roach believes that the shrinking US economy is dangerous for businesses. He said while talking to CNBC:

“This behavioral capitulation on the demand side of the U.S. economy is going to continue to create a lot of problems for businesses, business hirings, [and] potential corporate bankruptcies in the second half of this year.”

In this time of global uncertainty, gold has reached $1,870 per ounce that has not seen since September 2011. The narrative of the “safe-haven” asset for gold proves true to a large extent.

On the other hand, the leading digital asset crossed above $9,500 after remaining in the range between $9,000 and $9,300 over recent some weeks. Currently, it is trading at $9,496.

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