Digital Gold Dominance Shifts! XRP Overtakes Bitcoin as Correlation with Gold Price Surges

Since its inception, Bitcoin has been viewed as a means of storing value due to its inherent properties such as scarcity, impossibility of counterfeiting, and divisibility. Its continuously rising value over the past 10 years is often compared to gold within the cryptocurrency community, earning it the title of "digital gold." However, recent research has shown that the correlation between Ripple (XRP) and gold has surged, even surpassing that of Bitcoin.

• XRP ranked third in gold correlation last year, now surpassing Bitcoin
• Oil prices fluctuate, with higher volatility than Bitcoin

Top 10 Cryptocurrencies and Gold Correlation

The higher the positive correlation, the more closely the price is linked to gold. A negative correlation indicates an inverse relationship between the crypto asset and gold prices, while 0% correlation means no relationship between cryptocurrency and gold prices.

According to a report, XRP has the highest correlation with gold (34.1%), followed by Bitcoin at 21.5%, Ethereum (ETH) and Bitcoin Cash (BCH) at 20.1% and 19% respectively.

Tether (USDT) has a negative correlation of -37.7% with gold, as a USD stablecoin, the negative correlation with gold amidst its continuous rise is not surprising.

In 2019, Bitcoin had a 15.5% correlation with gold throughout the year, the highest among the top ten cryptocurrencies, followed by Bitcoin SV (BSV) at 7.3% and XRP at 7.1%. XRP's performance in gold correlation last year was also noteworthy.

Altcoins Show High Returns This Year

Since the beginning of this year, the crypto market has been generally rising. Among the top ten cryptocurrencies (excluding USDT), Bitcoin has performed the worst (134%), while Bitcoin SV (228%) and Bitcoin Cash (179%) have shown the best performance.

Other mainstream competing coins like BNB, EOS, ETH, LTC, XTZ, and XRP have brought investors returns ranging from 138% to 167%.

Oil Volatility Surpasses Bitcoin

Aside from not performing as well as mainstream competing coins, data platform Skew has made surprising findings. Their data indicates that crude oil prices (WTI) had a volatility of 105.3% in January, while Bitcoin's historical volatility dropped to 42.3%, hitting a new low since September.

It is reported that the drop in oil prices is attributed to tensions between the US and Iran, and the gradual impact of the coronavirus on the global financial markets may also be a major contributing factor.

Further Reading

• Tether introduces Tether Gold (XAU₮) cryptocurrency pegged to gold
• "Principle" author: Bitcoin's high volatility may make gold a safe haven asset during economic downturns

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