Bitcoin Correlation with Oil Prices Hits New High Amid Hormuz Crisis

The recent rise in the correlation coefficient between Bitcoin and WTI crude oil prices has sparked concerns about the digital gold narrative. According to Goldman Sachs analysts, Brent crude oil prices are expected to average $110 through April if Hormuz flows remain at 5% capacity.

The increased correlation is attributed to a shift in the way oil price fluctuations affect cryptocurrency markets. Historically, high oil prices have fueled inflation expectations, leading the Federal Reserve to keep interest rates high and reducing global liquidity that Bitcoin relies on.