Bitcoin climbed to a four-month high this week as investors fleeing market volatility once again treated the largest cryptocurrency as a safe haven, a shift that has strengthened its trading correlation with gold to levels not seen in nearly six years.
The digital asset reached $82,262 on Thursday before paring gains, closing the week near $79,800, down about 2% on Friday afternoon. The move ends a months-long slump that had kept Bitcoin trapped between $60,000 and $70,000 since early June, disappointing investors who hoped for a return to the October boom when it surged above $126,000.
André Dragosch, director of research for Europe at Bitwise, said in a note to clients that the recent upswing reflects investors treating Bitcoin more as a store of value than a risky tech stock. The shift follows Treasury Secretary Scott Bessent's proposal to increase the Treasury's buybacks of long-dated bonds as yields surged, a move that raised fears of «financial repression» and came as the 30-year yield hit its highest level in nearly two decades late last month, with the Iran war keeping inflation forecasts elevated.
«When things get serious and macro forces are strong, investors are discriminating less and less between bitcoin and gold as they navigate rising currency debasement risks,» Dragosch wrote. «In those scenarios, bitcoin has recently started to look like an amplified version of gold.»
The 90-day correlation between Bitcoin and gold has neared a six-year high, according to Dragosch's analysis. That marks a notable change from earlier this year, when Bitcoin traded more like a risk-on asset correlated with technology stocks. The last time Bitcoin and the dollar were this closely correlated was in 2020, as central banks worldwide responded to the COVID-19 pandemic with stimulus and quantitative easing, Dragosch warned.
Still, some traders caution that Bitcoin's recent gains could be short-lived. The four-year cycle theory, which holds that Bitcoin's bear market lows and bull market tops tend to occur in four-year increments, suggests the next bear market bottom could arrive around November, four years after the last bottom in November 2022, according to Fidelity's fourth quarter crypto market outlook.
The theory is partly tied to Bitcoin's halving process, which cuts rewards to miners that maintain the blockchain. Alex Thorn, Galaxy's head of firmwide research, wrote in a June report that «the historical analogies suggest a base case bottom for the current drawdown between $40k-46k occurring sometime between now and Q4 2026,» though he noted this was not a price prediction.
Chris Kuiper, vice president of research at Fidelity Digital Assets, said in the fourth quarter market outlook that the theory does not necessarily mean a downslide later this year, as the timing of the four-year cycle is not exact. «In light of this, having a long-term perspective and holding period is what has historically been the most beneficial for investors,» Kuiper wrote.
Bessent's proposed measure has not yet been rolled out, leaving uncertainty over how markets will respond. For now, Bitcoin's renewed correlation with gold suggests investors are increasingly viewing the cryptocurrency as a hedge against currency debasement rather than a high-growth technology bet, a shift that could define its trading pattern in the coming months.