Given the Trump administration’s vocal and demonstrated help for crypto, some traders are questioning whether or not gold’s days because the world’s favourite hedge asset are numbered.
André Dragosch, European head of analysis at Bitwise Asset Administration, suggests the selection isn’t so easy. In a put up on X Saturday, he provided a rule-of-thumb: gold nonetheless works finest as safety towards inventory market losses, whereas bitcoin more and more acts as a counterweight to bond market stress.
Gold: Fairness Hedge of Alternative
The reasoning begins with historical past. When equities unload, traders typically rush into gold. A long time of market knowledge again this up. Gold’s long-run correlation with the S&P 500 has hovered close to zero, and through market stress it typically dips destructive.
For instance, within the 2022 bear market, gold costs rose about 5% even because the S&P 500 tumbled practically 20%. That sample illustrates why gold remains to be thought of the traditional “secure haven.”
Bitcoin: A Bond-Market Counterweight
Bitcoin, against this, has typically struggled throughout fairness panics. In 2022, it collapsed greater than 60% alongside tech shares. However its relationship with U.S. Treasuries has been extra intriguing.
A number of research be aware that bitcoin has proven a low and even barely destructive correlation with authorities bonds. Meaning when bond costs sink and yields rise — as they did in 2023 throughout fears over U.S. debt and deficits — bitcoin has typically held up higher than gold.
Dragosch’s takeaway: traders don’t want to select one over the opposite. They play totally different roles. Gold remains to be the higher hedge when shares wobble, whereas bitcoin might assist portfolios when bond markets are beneath strain from rising charges or fiscal worries.
How the Rule Holds in 2025
The break up has been clear this yr. As of Aug. 31, gold was up greater than 30% year-to-date, based on World Gold Council knowledge. That surge displays renewed demand throughout bouts of fairness volatility tied to tariffs, slowing progress, and political threat.
Bitcoin, in the meantime, has gained about 16.46% this yr, based mostly on CoinDesk Knowledge, a strong efficiency contemplating that 10-year U.S. Treasury yields have fallen round 7.33%, based on MarketWatch knowledge.
The S&P 500, by comparability, is up roughly 10% in 2025, per CNBC knowledge.
The diverging efficiency underscores Dragosch’s heuristic: gold has benefited most from fairness jitters, whereas bitcoin has held its floor as bond markets wobble beneath the load of upper yields and heavy authorities borrowing.
Not Simply Opinion: Knowledge Backs It
This isn’t simply Dragosch’s private view. A Bitwise analysis report earlier this yr famous that gold stays a dependable hedge towards inventory market downturns, whereas bitcoin has tended to supply stronger returns throughout recoveries and reveals decrease correlation with U.S. Treasuries. The report concluded that holding each belongings can enhance diversification and optimize risk-adjusted returns.
The Caveats
Nonetheless, correlations aren’t static. Bitcoin’s ties to equities have strengthened in 2025 due to massive inflows into spot ETFs, which have introduced in billions from institutional traders.
The massive web inflows into spot Bitcoin ETFs makes BTC commerce extra like a mainstream threat asset, decreasing its “purity” as a bond hedge.
Brief-term shocks may also scramble the image. Regulatory surprises, liquidity squeezes, or macro shocks might transfer each gold and bitcoin in the identical path, limiting their usefulness as hedges. Dragosch’s rule-of-thumb, in different phrases, is simply that — a heuristic, not a assure.
The Backside Line
Trump’s pro-crypto stance raises a provocative query: is it time to desert gold completely in favor of bitcoin? Dragosch’s reply, supported by years of knowledge, isn’t any. Gold nonetheless works finest when shares tumble, whereas bitcoin might provide shelter when bonds are beneath strain. For traders, the lesson isn’t ditching one asset for the opposite, however recognizing that they hedge totally different dangers — and utilizing each stands out as the smarter play.
