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Author: Admin | 2025-04-27
By public companies. Source: CoinGeckoPrecious metalsWhen it comes to correlation with commodities and precious metals, silver beats gold in mirroring Bitcoin’s price moves since 2019. A November 2022 report by Jordan Doyle and Urav Soni of the CFA Institute titled “How do cryptocurrencies correlate with traditional asset classes?” shed some light on Bitcoin’s most-correlated assets.Crypto and commodities correlation heat map. Source: CFA InstituteSilver has been the commodity most closely-correlated to Bitcoin from October 2019 to October 2022, with a correlation coefficient of 0.26, according to the report. Gold’s correlation, by comparison, was just 0.15, perhaps due to silver’s greater volatility. The report notes:Silver has the highest correlation, peaking at 0.26 for silver and bitcoin. Bitcoin, the so-called 'digital gold,' exhibits only weak correlation with the precious metal.Passive and active equity funds and bonds When speaking of stocks as a whole and their correlation to Bitcoin, looking at an index or exchange-traded fund would be the most common way to make a comparison. This provides an overview of the asset class in general rather than zeroing in on one specific stock, which may have any number of factors affecting it. As might be expected, growth funds tend to be more correlated with cryptocurrencies, presumably due to their more speculative nature. Notably: “Growth funds exhibit a stronger correlation to cryptocurrencies than value funds. The correlation coefficient between small-cap growth funds and bitcoin, for instance, is 0.41, compared to 0.35 for small-cap value funds and bitcoin.” Crypto, equity funds and bonds correlation heat map. Source: CFA InstituteIn other words, crypto markets as a whole are “weakly sensitive to interest rate dynamics” that were at least partially responsible for a broad drawdown in equities throughout 2022. Finally, Bonds bear little to no relationship with Bitcoin. Passive bond funds showed a correlation of just 0.11, while active bond funds were just two basis points higher at 0.13. All data points are for the timeframe of October 2019 to October 2022.Bitcoin’s correlations are not a crystal ballDue to Bitcoin’s large price swings, all correlations can change at a moment’s notice. Still, the data used here provides an accurate picture of the assets most closely correlated to Bitcoin in the recent past. Related: Bitcoin and correlations: examining the relationship between btc, gold, and the nasdaqCrypto-specific stocks will likely continue having a strong correlation due to their Bitcoin holdings, while the correlation with commodities and equity funds could
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