A clear divergence is emerging between two popular “safe haven” assets. Currently, Bitcoin lags gold in performance as investors seek shelter from market storms. While gold has soared to a fresh record high of $4,200, Bitcoin is struggling to hold the $110,000 level, down 12% from its peak.
Why Bitcoin Lags Gold in Current Climate
The recent market turmoil highlighted this difference. When former President Trump threatened 130% tariffs on Chinese goods, Bitcoin plunged to $106,000. At the same time, gold’s rally accelerated. This reaction shows that in times of immediate geopolitical stress, traditional investors still flock to the ancient metal.
The numbers tell a stark story. Gold is up 60% this year, while Bitcoin lags gold with less than 20% gains. The gap is also visible in the ETF world. The leading gold ETF (GLD) holds $138 billion, significantly more than BlackRock’s Bitcoin IBIT fund at $91 billion. Gold is benefiting from massive central bank buying, with their holdings now exceeding U.S. dollar reserves for the first time since 1996.
Long-Term Perspective Offers Hope for Bitcoin
However, it’s not all bleak for Bitcoin. While Bitcoin lags gold in this specific scenario, its long-term track record remains superior. Over the past five years, Bitcoin has skyrocketed 861% compared to gold’s 105% gain.
The institutional story for Bitcoin also remains strong. Spot Bitcoin ETFs have attracted $27 billion in new money this year alone. Furthermore, Deutsche Bank predicts central banks will start adding Bitcoin to their reserves by 2030, which would be a game-changer for its legitimacy.
My Thoughts
This is a reality check for the “digital gold” narrative. While Bitcoin has incredible long-term potential, it’s clear that during sudden geopolitical crises, traditional finance still prefers the real thing. However, as Bitcoin matures and gains broader institutional acceptance, this dynamic could shift. The Deutsche Bank prediction about central bank adoption would be a major step toward closing this credibility gap.
