NEW YORK / LONDON (IT BOLTWISE) – Bitcoin is often viewed as a hedge against inflation, but the data shows a different picture. Instead, the weakening US dollar appears to be playing a larger role in the cryptocurrency’s price performance. These findings come from a recent analysis examining the correlation between Bitcoin, gold and macroeconomic factors.
Today’s daily deals at Amazon! ˗ˋˏ$ˎˊ˗
Bitcoin is often touted as digital gold and a hedge against inflation. But a current analysis shows that this assumption is not always true. According to research by NYDIG, inflation does not have a significant impact on the price of Bitcoin. Rather, it is the weakening US dollar that is giving both Bitcoin and gold a boost.
Greg Cipolaro, global head of research at NYDIG, emphasizes that the correlation between Bitcoin and inflationary measures is neither consistent nor particularly strong. Interestingly, however, it turns out that inflation expectations could be a better indicator for Bitcoin, even if the correlation is not tight.
Gold is traditionally viewed as a hedge against inflation, but here too a surprising picture emerges. Gold has an inverse correlation with inflation and behaves inconsistently over different time periods. This raises questions about gold’s role as an inflation hedge.
A weaker US dollar, on the other hand, has historically boosted both gold and Bitcoin. Cipolaro explains that Bitcoin has an inverse correlation to the US dollar, similar to gold, although this relationship is less consistent and newer with Bitcoin.
NYDIG predicts that the inverse correlation between Bitcoin and the US dollar will strengthen as Bitcoin becomes increasingly integrated into the traditional financial system. In addition to the US dollar, interest rates and the money supply also play a crucial role in the price development of Bitcoin and gold.
Gold tends to rise when interest rates fall and fall when interest rates rise. This relationship has also emerged and strengthened over time for Bitcoin. Global monetary policy also shows a strong and positive correlation with Bitcoin, with looser monetary policies tending to have a positive impact on the cryptocurrency.
Bitcoin’s price movements relative to gold in macroeconomic conditions illustrate its growing integration into the global monetary and financial system. While gold serves as a hedge against real interest rates, Bitcoin has become a barometer for liquidity.
*Order an Amazon credit card with no annual fee with a credit limit of 2,000 euros! a‿z
Bestseller No. 1 ᵃ⤻ᶻ “KI Gadgets”
Bestseller No. 2 ᵃ⤻ᶻ “KI Gadgets”
Bestseller No. 3 ᵃ⤻ᶻ “KI Gadgets”
Bestseller No. 4 ᵃ⤻ᶻ «KI Gadgets»
Bestseller No. 5 ᵃ⤻ᶻ “KI Gadgets”
Please send any additions and information to the editorial team by email to de-info[at]it-boltwise.de. Since we cannot rule out AI hallucinations, which rarely occur with AI-generated news and content, we ask you to contact us via email and inform us in the event of false statements or misinformation. Please don’t forget to include the article headline in the email: “Bitcoin and Gold: Interplay with the US Dollar”.
The post Bitcoin and gold: Interplay with the US dollar appeared first on Veritas News.
