Regardless of the continued cryptocurrency bear market, buyers have been more and more taking a look at Bitcoin (BTC) as a secure haven, a brand new research suggests.

The rise within the correlation between Bitcoin and gold (XAU) is without doubt one of the main indicators demonstrating buyers’ confidence in BTC amid the continued financial downturn, based on digital strategists on the Financial institution of America.

Bitcoin’s correlation with gold — which is often seen as an inflation hedge — has been on the rise this 12 months, hitting its highest yearly ranges in early October. The rising correlation pattern began on Sept. 5 after remaining near zero from June 2021 and turning destructive in March 2022, BofA strategists Alkesh Shah and Andrew Moss mentioned within the report.

“Bitcoin is a fixed-supply asset which will finally turn out to be an inflation hedge,” the strategists wrote. The expansion in BTC/XAU correlation will not be the one indicator signaling rising buyers’ confidence in Bitcoin as a retailer of worth although.

Bitcoin has additionally been more and more correlated with main shares just like the S&P 500 (SPX) and Nasdaq 100 (QQQ). The correlation between Bitcoin and each SPX and QQQ reached all-time highs on Sept. 13, the BofA strategists wrote, including:

“A decelerating optimistic correlation with SPX/QQQ and a quickly rising correlation with XAU point out that buyers could view Bitcoin as a relative secure haven as macro uncertainty continues and a market backside stays to be seen.”

BofA strategists additionally talked about large Bitcoin outflows from exchanges to non-public or self-hosted wallets. In accordance with the research, weekly BTC change outflows in early October had been the most important since mid-June, marking the third consecutive week of outflows. The strategists emphasised that giant and steady outflows to non-public wallets point out restricted near-term promote strain, stating:

“Traders switch tokens from change wallets to their private wallets after they intend to HODL, indicating a possible lower in promote strain.”

The BofA strategists talked about that the report’s methodology included knowledge from main Bitcoin exchanges, together with Binance, Coinbase, Coincheck, FTX, Gemini, Kraken and others.

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“The blockchain’s transparency offers us perception into the digital asset ecosystem that’s not accessible in conventional monetary markets,” the analysts said.

The brand new report comes amid the rising dangers of the worldwide financial recession, driving extra demand for the inflation hedge. Bitcoin has misplaced about 70% of its market worth amid the large crypto winter of 2022, triggering extra skepticism over its standing as an inflation hedge.