In the ever-evolving landscape of global assets, the relationship between gold and bitcoin (BTC) has come under scrutiny, particularly in light of recent market movements. What may or may not have been a blow-off top last week in the price of gold appears to have benefitted bitcoin, and this trend could well continue.
Gold has seen a remarkable rally over the past few months, especially following President Trump’s Liberation Day tariffs in early April. The price surged to new heights, ultimately peaking above $3,500 per ounce on April 21. During this period, bitcoin was trading at $87,000—essentially flat from Liberation Day but down about 20% from its record high in January.
However, the landscape shifted dramatically post-peak. Over the last few weeks, gold experienced a notable decline, dropping nearly 10% to its current price of just above $3,200 per ounce. Contrarily, bitcoin has made a resurgence, rallying approximately 10% to reach a two-month high of $97,000.
Geoff Kendrick from Standard Chartered has weighed in on the matter, stating, “I think bitcoin is a better hedge than gold against strategic asset reallocation out of the U.S.” This perspective underscores a trend where institutional investors appear to be favoring bitcoin over gold as a hedge against market volatility.
Additionally, Kendrick highlighted the shift in ETF inflows. The influx of funds into bitcoin ETFs has surged past that of gold ETFs, marking a significant change in investor sentiment. In fact, he noted that the last time bitcoin ETF inflows had such a wide margin over gold was during the week of the U.S. presidential election. Remarkably, just two months later, bitcoin’s price rose more than 40%, exceeding $100,000.
As the dynamics between these two assets continue to unfold, it will be interesting to monitor how this shift in asset allocation impacts the broader financial market. With ongoing uncertainties and a potential flight to safer assets, the spotlight remains firmly on bitcoin as it carves a niche alongside traditional hedge assets like gold.
