Bitcoin’s correlation with Gold reached a record high at the heights of the US-Iran tensions earlier this year. As both the assets rose in tandem against the gloomy geopolitical sentiment, leading experts said the cryptocurrency is behaving like a safe-haven asset.
But heading into the second week of February, bitcoin is shifting its bias to suit a risk-on narrative. The asset so far in the week has moved in the opposite direction of Gold, almost switching sides to tail the equity markets instead, with Coronavirus epidemic behaving as a leading indicator.
Bitcoin correlation with Gold fell in the second week of February | Source: TradingView.com, ICE, Coinbase
In retrospect, equity markets played to the whims of Coronavirus updates all this month. Any signs of easing fears led to growth in stock markets. Similarly, worrisome reports about the outbreak reversed gains.
Gold, a perceived safe-haven asset, reacted almost negatively to the moves in the stock market. Improving risk-on sentiment saw the yellow metal experienced a plunge. On the other hand, gloomy equity conditions helped Gold either rise or maintain gains, showing investors treated it as hedging asset.

The macroeconomic correlations left bitcoin with a choice to tail either of the assets: risk-on or risk-off. Just this week, the cryptocurrency chose to follow the risk-on, i.e. global equity sentiments.
Easing Policies behind Bitcoin’s Pump
Prominent market analyst Mati Greenspan said in his interview with BlockTV that Bitcoin left its safe-haven cloak behind as soon as the Coronavirus epidemic kicked the equity markets.
The Quantum Economics founder credited central banks for pumping the cryptocurrency, noticing that their stimulus packages to safeguard market against the virus fears made way into bitcoin. Excerpts from his statements:
“The People’s Bank of China has already injected some $170 billion into its economy. The [Federal Reserve] has recently resumed its quantitative easing, so as the European Central Bank.”
That left stocks and bitcoin with the same bullish catalyst: free money with lower interest rates. Nevertheless, with China reporting a jump in cases related to Coronavirus, and analysts warning over the virus’s long-term impact on the global market, it appears even free money cannot safeguard risk-on markets.
Seema Shah, the chief strategist at Principal Global Investors, said that the market sentiment will eventually deteriorate. That would leave the central banks to provide additional easing measures.
For bitcoin, it is all about switching sides. Investors can start perceiving it as a safe-haven again should the central bank refuses to inject more liquidity into the system. As of now, the cryptocurrency remains an asset having dual personalities.