With Bitcoin showing positive gains for the third consecutive month, there is evidence that the cryptocurrency is once again being seen as a safe-haven asset by investors. Data from Coin Metrics suggests that Bitcoin is no longer trading in tandem with the S&P 500, and the correlation between the two is the weakest it has been since September 2021.

Bitcoin Breaks Away From Equities

This makes sense because Bitcoin’s valuation is not dependent on earnings growth, as is the case with equities. Alex Thorn of Galaxy Digital commented on the data, saying:

The correlation data shows that, at least recently, Bitcoin has indeed been performing more like a safe-haven asset than a risk asset.

At present, the cryptocurrency is up about 70% for the year. The banking crisis has also allowed Bitcoin to reestablish the correlation it once shared with gold, therefore solidifying its status as a “risk-off” asset.

A Bright Future Ahead

Thorn added:

Given the nature of current crisis – in which fractional reserve banking system’s core limitations are tested – Bitcoin’s fundamental characteristics genuinely distinguish and offer a safe port in a storm.

The rate hikes experienced in 2022 are now coming to an end, and this should give Bitcoin a clearer path towards further upside. Last week, Fed Chair Powell indicated that there would be only one more rate hike this year.