• The widely-tracked copper-to-gold ratio continues to slide in the wake of China's stimulus announcements, offering negative cues to risk assets.

• BTC's best years have been characterized by copper's outperformance relative to gold.

From the increasing probability of pro-crypto Republican candidate Donald Trump winning the upcoming U.S. presidential election to expectations for Fed rate cuts, bitcoin {{BTC}} bulls have several things to cheer about. However, the widely-tracked copper-to-gold ratio, continues to slide, flashing a red signal for risk assets, including cryptocurrencies.

The ratio, which represents the division of price per pound of copper by per ounce price of gold, has hit a fresh year-to-date low, reaching the levels seen in late 2020, according to data source TradingView.

The metric, considered a proxy for the global economic health and investor risk appetite, has dropped over 15% this year, the biggest loss since 2018.

Telltale sign of economic malaise?

What's probably more concerning is that the ratio has declined by 10% since China, the world's factory and largest importer of commodities, unveiled a string of stimulus measures in late September to support its ailing economy.

The U.S. Federal Reserve (Fed) delivered an outsized 50 basis points interest rate cut in September, supposedly kicking off the so-called liquidity easing. However, that too failed to put a floor under the ratio.

The persistent slide could be a telltale sign of a grittier economic picture that risk assets are probably overlooking. Copper, being an industrial metal, tends to do well when the global economy is expanding, and has historically reacted positively to China's stimulus announcements. Gold, meanwhile, is considered a safe haven. Hence, a falling copper-to-gold ratio is widely seen as a risk-off signal.

BTC vs copper-to-gold ratio

As of writing, BTC was up 60% for the year, trading near $67,800, according to CoinDesk data.

However, most gains occurred in the first quarter and since then, the bulls have consistently failed to secure a new base above the $70,000 mark. The bull failure has been attributed to several factors, including supply overhang fears stemming from defunct exchange Mt. Gox's credit reimbursements.

Coincidentally, the slide in the copper-to-gold ratio began in May, offering risk-off cues. The downtrend gathered steam in July, presaging the brief early August risk aversion in financial markets that saw BTC slide from $65,000 to $50,000.

Besides, data from TradingView show that BTC's best years – 2013, 2016-17, and 2020-21 – have been characterized by an uptrend in the copper-to-gold ratio.