“The correlation between Bitcoin and political uncertainty is negative for all three variables GPU6M, GPU3M, and GPU1M (\u22120.220, \u22120.276, and \u22120.152, respectively), which gives us a first indication of the directional relationship. When political uncertainty goes up, Bitcoin’s return goes down,” \u2013 wrote Mr. Burggraf.<\/p><\/blockquote>\n<\/div>\n
Anomalies<\/h2>\n<\/div>\n<\/div>\n
Data that served as the basis to understand bitcoin’s return and GPU came from CoinMarketCap.com<\/a> and the US Federal Election Commission, respectively.<\/p>\n
However, the study focused on prices and election data recorded between April 28, 2013, and October 31, 2019. Up until 2018, bitcoin’s volatility was much higher and was subject to a higher degree of price manipulation. It was only after April 2019 that the cryptocurrency started responding actively to global events (the US-China trade war<\/a> is a prime example).<\/p>\n
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While Mr. Burggraf’s quantile regression didn’t agree with bitcoin’s status as a safe-haven asset, a separate Bloomberg study in August 2019 said otherwise. The global financial news provider found that the cryptocurrency’s correlation with Gold<\/a>, a traditional hedging asset, reached its highest between April 2019 and July 2019.<\/p>\n
Bitcoin’s Latest Safe-Haven Act<\/h2>\n
The correlation efficiency between gold and bitcoin touched its four-year high in January 2020<\/a>. Both climbed almost in tandem after a US-sponsored airstrike killed a top Iranian military commander and led the Middle East on the brink of a serious geopolitical conflict.<\/p>\n
Prominent market analyst Alex Kruger<\/a> spotted the growing proximity between the two assets. He saw it as a sign of bitcoin becoming a more macro asset. Excerpts:<\/p>\n
“Bitcoin is in the process of becoming a macro asset as the market matures. In the meantime bitcoin is also a hedge against the TAIL-RISK of fiat systems collapsing, i.e. a put option on central banks without expiry.”<\/p><\/blockquote>\n
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13\/ This is how bitcoin traded the Iran events. Notice the lag. Lag = Opportunity \ud83d\udc47 pic.twitter.com\/bSK7DxlhRz<\/a><\/p>\n
— Alex Kr\u00fcger (@krugermacro) January 28, 2020<\/a><\/p><\/blockquote>\n