Bitcoin has recently transitioned from being seen as ‘digital gold’ to a metric of risk within the financial markets, especially during the evolving U.S.-China trade dispute. This indicates a notable change in its market behavior, where Bitcoin’s correlation with the AUD/JPY currency pair has become increasingly pronounced, contrasting its previous association with gold.

What You Need to Know:

• The ongoing trade tensions have heightened market volatility, leading investors to seek assets that serve as effective hedges against risk.
• Bitcoin is now exhibiting a stronger correlation with the AUD/JPY pair than with gold, indicating it reflects market risk appetites more precisely.

Key Insights:

• As the trade conflict escalates, data shows Bitcoin’s correlation with the AUD/JPY has risen, reaching levels not seen since November 2021.
• Meanwhile, the correlation with gold has dipped to -0.80, showcasing their opposing trends during this tumultuous period.

It appears that Bitcoin is increasingly utilized as a risk barometer by traders, mirroring shifts in market sentiment similarly to the AUD/JPY dynamics.