Ethereum Shows Robust Correlation with Gold

New market data displays Ethereum’s strong correlation with Gold. As per the popular crypto analyst Michaël van de Poppe, the rising correlation of Ethereum with Gold points toward the influence of macroeconomic factors on the digital assets. The analyst took to social media to discuss the Ethereum-Gold correlation and the potential outcomes thereof.

Strong Ethereum-Gold Co-Relation Increases Chances for High Risk-On Scenario for Ethereum

Michaël van de Poppe has highlighted the price movements of Ethereum ($ETH) in comparison with Gold. In line with the historical data, Gold has been working as a significant hedge against economic uncertainty and inflation. Hence, if Gold enters a bear market for six to twelve months following reaching a peak in this market cycle, it could denote a catalyst. Such a development could facilitate a risk-on scenario within the crypto sector, especially for Ethereum. The respective shift would persuade investors to specify additional capital for rapidly growing digital assets.

In this respect, several sectors in the crypto market will potentially experience massive capital inflows. These areas include revenue-generating altcoins, Ethereum ecosystem, DeFi sector, crypto and AI integration, ETF-based crypto coins, as well as real-world assets. Thus, the assets having real-world use cases and viable revenue models will potentially experience a surge in investor interest. Additionally, the DeFi world, including the substitutive financial services like yield farming and lending, could also witness a risk-on atmosphere.

Prolonged Downturn in Gold’s Price Could Lead to Enormous Altcoin Rally

According to Michaël van de Poppe, the Ethereum ecosystem is among the top crypto beneficiaries to see a risk-on environment. Keeping this in view, a comprehensive dip in Gold after a peak could raise the adoption of Ethereum as well as the projects associated with it. Therefore, if Gold goes through a lengthy decline, it could trigger a huge altcoin rally.