According to the data from Excalibur Pro Inc. cited by the Wall Street Journal (WSJ), the past five days saw a striking correlation between BTC and traditional assets market.
According to the data cited by the WSJ, bitcoin has traded at 0.84 correlation to gold over the past five days, where -1 indicates complete inversion and +1 perfect correlation. Notably, BTC has also traded at 0.77 correlation to the Chicago Board of Options Exchange’s (CBOE) Volatility index (VIX), which is regarded as a benchmark index for the U.S. equity market volatility.
The WSJ attributes this correlation to the flow of funds to Bitcoin Investment Trust run by Grayscale, which has already over $900 million under its management.
The increased venture capital (VC) investment in bitcoin and blockchain is seen as another factor underlying the said high correlation. Venture investment in crypto has reached $2 billion in the last five years.
The WSJ also point out that the building of trading services and infrastructure with high regulatory compliance and the emergence of cryptocurrency futures trading serve as pull factors for traditional capital into crypto.
Correlation between gold and BTC trading is far from being a mere coincidence, as historic bitcoin and gold price charts has long been showing striking resemblance.