According to an article published by the Wall Street Journal, the price of bitcoin and gold is trading in a correlation with each other. The price of gold has mostly been trading opposite to the stock markets as gold is considered a hedge to the stock markets. From the last 5 days, gold and bitcoin have been trading in a similar pattern.
According to the report, bitcoin and other top cryptocurrencies have been trading at around 0.84 correlation with the price of gold where -1 represents a complete inversion and +1 represents a correlation.
Why is bitcoin rising?
The article explains that large institutional investors are entering into the cryptocurrency space with Bitcoin being the primary investment.
According to the publication, assets under management worth $55 million were seen by the trust in 2013. In the end of last year when the price of bitcoin was at the highest point, the assets under management also saw a rise to around $3.5 billion. For now, as the market is in a downtrend, only around $900 million are retained by the assets under management.
The publication also explains that the venture capital investment in bitcoin was around $96 million in 2013 whereas it saw rise up to $500 million in 2016 and again a surge last year when the venture capital investment into cryptocurrency space was around $2 billion.
With the regulation of bitcoin and other cryptocurrencies rising around the world especially the United States of America, more and more institutional investors are entering into the cryptocurrency space. Another great news for the crypto environment is the launch of Bakkt Exchange early next year which will allow the physical delivery of bitcoin futures. Other great events such as the launch of Fidelity’s digital asset business is also proving to be quite beneficial for cryptocurrencies especially bitcoin.
Bitcoin Price Analysis:
Bitcoin saw a whopping surge in price yesterday when the price of bitcoin increase by more than $250 in just a matter of minutes. The chart of bitcoin shows a formation of ‘head and shoulders’ which explains the high possibilities of a massive bullish run in the near future. Bitcoin might rise straightaway up to $5500 if the pattern proves to be correct. The next major resistance for bitcoin lies between $5300 and $5500.
The following article is not financial advice. The readers are advised to do their own research and analysis before investing in the cryptocurrency market which is quite risky.