Bitcoin’s correlation with gold “increased significantly” amid the coronavirus-induced sell-off of last month, according to a report published by ETF and Mutual Fund Manager VanEck Global.

According to the report, bitcoin’s correlation with traditional asset classes started increasing during the coronavirus-induced market sell off that saw all three major U.S. stock market indices enter bear market territory, but its correlation with gold hit new highs, while its correlation with U.S. bonds also increased significantly.

Both gold and U.S. bonds have historically been seen as safe-haven assets investors turn to during equity market sell-offs. Last month, when equity markets started dropping, cryptocurrencies, bonds and commodities also dropped, with bitcoin losing 40% of its value on March 12, before recovering.

The flagship cryptocurrency’s recovery saw it outperform all major U.S. stock market indices, losing 10.2% of its value in the first quarter of the year. During the same period, the S&P 500 dropped 20%, while the Dow lost 23.2%.

VanEck’s report reads:

We believe this may further cements its relationship with what is commonly viewed as safe haven assets and may bolster its potential as “digital gold.

The report notes that a small allocation of bitcoin to a 60% equity and 40% bond portfolio would’ve had significantly reduced volatility throughout the recent sell-off adding that a Bitcoin ETF “may have significantly reduced volatility for 60% equity/40% bond blended portfolios.”

VanEck’s report notes, however, that the long-term correlation between bitcoin and the precious metal remains low. Bitcoin’s features have seen various prominent figures in the community claim it’s “gold 2.0” as its seen as a digital equivalent to the precious metal. Its correlation to it likely bolsters the theory.

It’s worth noting that while various analysts believe bitcoin is a safe-haven asset that will outperform gold in the future, others claim the cryptocurrency has to be uncorrelated from traditional markets, including gold, to shine.

Featured image via Pixabay.