Gold and Bitcoin have long been seen as two of the most stable and reliable assets in the global financial markets. Both have a reputation for maintaining their value over time, and they have become increasingly popular among investors seeking a safe haven from market volatility.
Analyzing the Coincidence: Gold Price Surges Correlate with Bitcoin’s Ascension
When gold hits a new high, Bitcoin is likely to follow suit.
Gold and Bitcoin have long been seen as two of the most stable and reliable assets in the global financial markets. Both have a reputation for maintaining their value over time, and they have become increasingly popular among investors seeking a safe haven from market volatility.
Recently, the price of gold has surged to a new all-time high, igniting speculation about whether Bitcoin is likely to follow suit. Historically, data has shown that when gold reaches new highs, Bitcoin tends to follow within a relatively short period of time, typically within 150 days.
The History of Gold and Bitcoin
In 2017, Bitcoin rallied to $19,120 after gold witnessed a 30% hike a few months earlier. Similarly, in 2020, gold reached a new high near $2,075 during the COVID-19 pandemic, which preceded Bitcoin’s surge to $69,000 in 2021.
The correlation between the two assets is no coincidence. As Joe Consorti, head of growth at Theya, pointed out, “When the printer roars to life, gold sniffs it out first, then Bitcoin follows harder.”
The Analogy of “Minsky Moments”
The correlation between gold and Bitcoin is often referred to as a “Minsky Moment”, named after the economist Hyman Minsky, who studied the relationship between financial markets and the global economy. In a Minsky Moment, a sudden shift in market sentiment can lead to a rapid increase in prices, fueled by a combination of factors such as investor sentiment, global economic uncertainty, and monetary policy.
Bitcoin’s Cycle and the Power Law
Bitcoin’s price cycle is characterized by parabolic growth, followed by a correction, and then another parabolic growth phase. This cycle is often referred to as a “power law” phenomenon, where small changes in price lead to larger and larger increases in price over time.
Using the power law model, an analyst normalized Bitcoin’s market cap to gold’s and plotted BTC on a logarithmic scale, measuring each Bitcoin in ounces of gold instead of dollars. This visual representation of Bitcoin’s price movement shows that the cryptocurrency has been following a predictable trajectory, with gold acting as a leading indicator.
The Price Prediction
Based on this analysis, the same analyst predicted that Bitcoin will enter a new parabolic phase in the latter half of 2025, with a price target as high as $400,000. This prediction is based on the assumption that gold will continue to act as a leading indicator for Bitcoin, and that the cryptocurrency will follow suit when gold reaches new highs.
The Role of Tariffs and Interest Rates
The performance of both gold and Bitcoin is heavily influenced by global economic conditions, including tariffs and interest rates. Rising interest rates and a weakening dollar can signal the US is behaving like an emerging market, causing investors to seek safer haven assets like gold and Bitcoin.
In a recent interview, Galaxy Digital CEO Mike Novogratz noted that Bitcoin and gold are “key indicators of financial stewardship” amid global macroeconomic uncertainty. He emphasized that Bitcoin thrives in market turbulence, driven by a weakening US dollar and capital flowing into safe havens like gold.
