The copper-to-gold ratio has broken above its 200-day moving average for the first meaningful time since September 2020, a development that has historically coincided with the early stages of bitcoin bull markets.
The ratio currently stands at 0.00142, with copper trading at $6.65 per pound and gold near $4,700 per ounces. Previous increases in the ratio in 2013, 2017 and 2021 coincided with large increases in bitcoin prices.
The correlation coefficient between bitcoin and the copper-to-gold ratio currently stands at -0.11, although it has risen sharply from -1.00. This suggests that the two assets are not yet positively correlated, but the relationship is starting to strengthen. Historically, during bitcoin’s strongest bull runs, the correlation has moved toward or above 1.0.
The current negative reading largely mirrors the earlier divergence phase where the ratio was declining and bitcoin typically fell faster than copper. As the relationship recovers, this relationship has historically converged with improving market conditions.
Historically, the copper-to-gold ratio has led bitcoin by several weeks to months, suggesting that the current move may still be in its early stages.
The copper-to-gold ratio is widely seen as a measure of economic momentum and investors’ risk appetite. Copper is closely linked to industrial demand and tends to perform better during periods of economic expansion, while gold is traditionally associated with defensive positioning. A rising ratio therefore signals a riskier macro environment.
