Bitcoin, a favorite among investors over the last five years, has outperformed gold ninefold and attracted attention with returns of up to 1,000 percent.
However, 2025 has shifted the balance. While gold has risen 45 percent since January, Bitcoin has gained only 20 percent in the same period.
Central banks and pension funds are turning to gold as a safe haven against inflation, budget deficits, and global uncertainty. While Bitcoin hasn't performed poorly, its performance is more in line with tech stocks, leading investors to question the “digital gold” metaphor.
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Ed Egilinsky, head of alternative investments at Direxion, commented, “Bitcoin is a risky asset and will remain so until proven otherwise.” According to Egilinsky, while gold serves a diversifying and protective role in portfolios, Bitcoin is more prominent as a short‑term trading instrument.
Since 2017, Bitcoin's 30‑day average correlation with the tech‑focused Nasdaq 100 index has been 0.32, while its correlation with gold has remained at just 0.09. In other words, Bitcoin largely follows the rhythm of Silicon Valley, rising when risk appetite is high and falling when markets are tight. Gold, on the other hand, shines when the world is in turmoil.
Lawrence Lepard, founder of Equity Management Associates, argues that we've entered a period where quantitative easing is inflating asset prices. According to Lepard, gold has the upper hand in this scenario because institutional investors are still wary of Bitcoin's volatile nature.
*This is not investment advice.