Investors have coined the term “digital gold” to describe Bitcoin. Comparing this new economy asset class with a traditional one like gold, we see both have limited supply, are used as mediums of exchange, and thought of as safe haven assets. However, the spread and volatility of Bitcoin has been, historically, significantly higher than gold. As Bitcoin matures and develops stronger infrastructure and deeper liquidity, we will see a convergence towards traditional asset classes whilst maintaining its own unique profile. Last 12 month (as of Dec 2020) Bitcoin correlation to gold has been at an all time high, despite Bitcoin heading up over 200% and gold hovering around 30%.

MVIS CryptoCompare Bitcoin Benchmark Rate vs. Gold Price


Source: MV Index Solutions GmbH.  All values are rebased to 1000. Data as of 17 December 2020.

About the Author:

Joy Yang is Global Head of Index Product Management at MV Index Solutions (MVIS). She is responsible for managing MVIS products and services to accelerate innovation in financial index design and adoption. Joy brings more than 25 years of investment experience to MVIS, having led teams delivering index and quantitative-active investment solutions at Arabesque Asset Management, Dimensional Fund Advisors, Vanguard, Aberdeen Standard Investments, AXA Rosenberg and Blackrock. Joy has an MBA from the University of Chicago Booth School of Business, and a BS in Electrical Engineering from Cooper Union’s Albert Nerken School of Engineering.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.