In a development that would have seemed improbable just months earlier, the correlation between Bitcoin and gold reached an all-time high of 70% in August 2020, according to data from analytics firm Skew. The milestone came as both assets surged in tandem — Bitcoin broke above $12,000 for the first time in a year while gold touched a record $2,000 per ounce — driven by unprecedented monetary stimulus and a weakening US dollar in the wake of the COVID-19 pandemic.
TL;DR
- Bitcoin-gold monthly average correlation reached a record 70%, surpassing the previous peak of just under 60%
- Bitcoin hit a year-to-date high above $12,000 while gold surged to a record $2,000 per ounce
- Skew attributed the rising correlation to the “money printer go brrr” era of central bank money creation
- The US dollar declined approximately 3% year-to-date as governments doled out trillions in stimulus
- Bloomberg had forecast Bitcoin would mature into a gold-like store of value in 2020
The Record Correlation
London-based data analytics firm Skew reported that the one-month correlation between Bitcoin and gold prices reached new all-time highs in early August 2020, peaking at 70%. The previous record of just under 60% had been established earlier in the second quarter of 2020. In a tweet that captured the zeitgeist of the era, Skew noted: “Bitcoin/Gold 1 month correlation reaching new all-time highs, giving momentum to the store-of-value narrative for BTC in these ‘money printer go brrr’ times.”
The timing was significant. Both assets had been rising sharply throughout 2020 as governments and central banks around the world engaged in unprecedented monetary expansion to combat the economic devastation caused by COVID-19 lockdowns. The US Federal Reserve alone expanded its balance sheet by over $3 trillion in a matter of months, while Congress passed multiple stimulus packages totaling trillions of dollars.
The Dollar Decline and Safe Haven Narrative
The catalyst behind both Bitcoin and gold’s simultaneous ascent was the same: a steadily weakening US dollar. The greenback had declined roughly 3% year-to-date by August 2020, according to Reuters data, as investors rotated out of the world’s reserve currency and into assets perceived as stores of value. The dollar index, which measures the currency against a basket of major peers, had fallen to its lowest levels in two years.
For gold, the narrative was straightforward. The precious metal has been a safe haven asset for millennia, and the combination of zero-bound interest rates, quantitative easing, and fiscal profligacy made it an obvious beneficiary. Gold’s surge past $2,000 per ounce on August 4, 2020, represented a nominal all-time high, reflecting the metal’s status as the ultimate hedge against currency debasement.
For Bitcoin, the story was more nuanced but equally compelling. The cryptocurrency’s fixed supply cap of 21 million coins made it an attractive alternative in a world where central banks were creating money at an accelerating pace. Bloomberg’s earlier report forecasting that Bitcoin would mature into a gold-like store of value in 2020 appeared to be playing out in real time. The financial data provider noted that Bitcoin’s rising correlation with gold supported the thesis that BTC was transitioning from a risk-on speculative asset to the crypto market’s version of the precious metal.
The Flash Crash: A Correlation Stress Test
The strength of the Bitcoin-gold correlation was tested almost immediately. On August 11, just one day after both assets hit their respective highs, news broke that Russia had approved a vaccine for COVID-19. The announcement triggered a sharp risk-on rotation across global markets. Bitcoin fell more than 3.9% to as low as $11,200, while gold suffered its biggest one-day crash in seven years, plunging 4.7% to $1,932 per ounce.
The synchronized decline was arguably the strongest validation of the correlation thesis. When both assets fell together on the same catalyst, it demonstrated that they were being traded as part of the same macro narrative — a remarkable development for a cryptocurrency that had been dismissed by many traditional investors as uncorrelated digital speculation just years earlier.
Robert Kiyosaki and the Retail Narrative
The Bitcoin-gold correlation also captured the attention of mainstream financial commentators. Robert Kiyosaki, author of the bestselling personal finance book “Rich Dad, Poor Dad,” took to Twitter to share his perspective with his 1.4 million followers. “Real problem is massive debt and weak economy. Fed must print. I am an investor. Great time to buy more gold, silver and bitcoin,” he wrote.
Kiyosaki’s framing — lumping Bitcoin alongside gold and silver as hard assets worth accumulating during monetary expansion — reflected a broader shift in public perception. The narrative was no longer about Bitcoin as a niche technology experiment; it was increasingly being discussed as a legitimate component of a diversified safe haven portfolio.
What the 70% Correlation Really Means
It is worth noting that a 70% correlation, while significant, falls well short of perfect positive correlation (100%). This means that while Bitcoin and gold were broadly moving in the same direction during August 2020, there was still meaningful independent variance in their price movements. Bitcoin’s volatility remained orders of magnitude higher than gold’s, and the cryptocurrency continued to experience intraday swings that would be extraordinary in traditional commodity markets.
Nevertheless, the record correlation marked a turning point in Bitcoin’s evolution. For the first time, the data supported what Bitcoin advocates had been arguing for years: that the cryptocurrency was beginning to behave like digital gold, responding to the same macroeconomic forces that drove the precious metal. The “money printer go brrr” meme may have originated as internet humor, but the underlying dynamic — central bank money creation driving investors toward scarce assets — was now supported by hard data.
Why This Matters
The record 70% Bitcoin-gold correlation of August 2020 was a landmark moment in the maturation of cryptocurrency as an asset class. It provided the first statistically significant evidence that Bitcoin was not merely a speculative instrument but a macroeconomic hedge responding to the same forces driving traditional safe haven assets. The simultaneous surge past $12,000 for BTC and $2,000 for gold — followed by their synchronized decline on the Russian vaccine news — demonstrated that the two assets had become linked in ways that would have seemed impossible during Bitcoin’s early years. For regulators, institutional investors, and policymakers, the correlation data point underscored that Bitcoin could no longer be ignored in discussions about monetary policy, inflation hedging, and the future of money itself.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making investment decisions.