Gold Priced in Bitcoin (XAU/BTC)
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Correlation between XAU/BTC and Bitcoin, S&P 500, Nasdaq, gold and oil
Think of it this way
Both are insurance against the same breakdown, but one is sold by a long-established company and the other by a new one. When people are calm they buy from the new one; when they get truly scared, they go back to the old one.
What is Gold Priced in Bitcoin (XAU/BTC)?
How many bitcoins one ounce of gold costs. Both are assets with no cash flow and nobody standing behind them, and both are called safe havens, but they do not react to the same things.
How to read Gold Priced in Bitcoin (XAU/BTC)
It rises when gold outperforms bitcoin; it falls when bitcoin outperforms gold. Read the slope, not the level. The Invert button shows it as BTC/XAU, which is the amount of gold one bitcoin buys. There is only data on days when both trade.
What Gold Priced in Bitcoin (XAU/BTC) means for the market
Gold rises when people distrust the monetary system or the fiscal course. Bitcoin rises for that reason too, but it also needs risk appetite, and it falls when there is none. That is the value of the ratio: it separates the two things. Falling, there is monetary distrust with risk appetite. Rising, there is monetary distrust without risk appetite, which is fear, and fear is usually bad news for other assets.
Where the money flows
No money flows through a ratio: it is not a market, it is a division between two prices that are. What is interesting is what disappears when you divide. Both prices are in dollars, so the dollar cancels out: a stretch in which both rise because the dollar weakens leaves this line flat, even though the two series are each rising. What remains is money moving from one asset to the other, with the currency taken out.
What to watch in Gold Priced in Bitcoin (XAU/BTC)
It is the pair that tells fear from greed. Both rising together in dollars says the market is pricing in a monetary problem; which of the two rises more says whether it is pricing it in calmly or in panic.
It does not measure liquidity: it separates monetary distrust from risk appetite.