Despite the ongoing cryptocurrency bear market, investors have been increasingly looking at Bitcoin 

BTC

$16,932

 as a safe haven, a new study suggests.

The rise in the correlation between Bitcoin and gold (XAU) is one of the major indicators demonstrating investors’ confidence in BTC amid the ongoing economic downturn, according to digital strategists at the Bank of America.

Bitcoin’s correlation with gold — which is commonly viewed as an inflation hedge — has been on the rise this year, hitting its highest yearly levels in early October. The growing correlation trend started on Sept. 5 after remaining close to zero from June 2021 and turning negative in March 2022, BofA strategists Alkesh Shah and Andrew Moss said in the report.

“Bitcoin is a fixed-supply asset that may eventually become an inflation hedge,” the strategists wrote. The growth in BTC/XAU correlation is not the only indicator signaling growing investors’ confidence in Bitcoin as a store of value though.

Bitcoin has also been increasingly correlated with major stocks like the S&P 500 (SPX) and Nasdaq 100 (QQQ). The correlation between Bitcoin and both SPX and QQQ reached all-time highs on Sept. 13, the BofA strategists wrote, adding:

“A decelerating positive correlation with SPX/QQQ and a rapidly rising correlation with XAU indicate that investors may view Bitcoin as a relative safe haven as macro uncertainty continues and a market bottom remains to be seen.”

BofA strategists also mentioned massive Bitcoin outflows from exchanges to personal or self-hosted wallets. According to the study, weekly BTC exchange outflows in early October were the largest since mid-June, marking the third consecutive week of outflows. The strategists emphasized that large and continuous outflows to personal wallets indicate limited near-term sell pressure, stating:

“Investors transfer tokens from exchange wallets to their personal wallets when they intend to HODL, indicating a potential decrease in sell pressure.”

The BofA strategists mentioned that the report’s methodology included data from major Bitcoin exchanges, including Binance, Coinbase, Coincheck, FTX, Gemini, Kraken and others.

Related: Bitcoin profitability for long-term holders declines to 4-year low: Data

“The blockchain’s transparency gives us insight into the digital asset ecosystem that’s not available in traditional financial markets,” the analysts stated.

The new report comes amid the rising risks of the global economic recession, driving more demand for the inflation hedge. Bitcoin has lost about 70% of its market value amid the massive crypto winter of 2022, triggering more skepticism over its status as an inflation hedge.