Given the Trump administration’s vocal and demonstrated assist for crypto, some buyers 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 submit on X Saturday, he supplied a rule-of-thumb: gold nonetheless works greatest as safety towards inventory market losses, whereas bitcoin more and more acts as a counterweight to bond market stress.
Gold: Fairness Hedge of Selection
The reasoning begins with historical past. When equities dump, buyers usually rush into gold. A long time of market information again this up. Gold’s long-run correlation with the S&P 500 has hovered close to zero, and through market stress it usually dips damaging.
For instance, within the 2022 bear market, gold costs rose about 5% even because the S&P 500 tumbled almost 20%. That sample illustrates why gold remains to be thought of the traditional “protected haven.”
Bitcoin: A Bond-Market Counterweight
Bitcoin, in contrast, has usually 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 damaging 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: buyers don’t want to choose one over the opposite. They play completely different roles. Gold remains to be the higher hedge when shares wobble, whereas bitcoin could 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 12 months. As of Aug. 31, gold was up greater than 30% year-to-date, based on World Gold Council information. That surge displays renewed demand throughout bouts of fairness volatility tied to tariffs, slowing development, and political threat.
Bitcoin, in the meantime, has gained about 16.46% this 12 months, primarily based on CoinDesk Information, a strong efficiency contemplating that 10-year U.S. Treasury yields have fallen round 7.33%, based on MarketWatch information.
The S&P 500, by comparability, is up roughly 10% in 2025, per CNBC information.
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 burden of upper yields and heavy authorities borrowing.
Not Simply Opinion: Information Backs It
This isn’t simply Dragosch’s private view. A Bitwise analysis report earlier this 12 months famous that gold stays a dependable hedge towards inventory market downturns, whereas bitcoin has tended to offer stronger returns throughout recoveries and exhibits 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 because of massive inflows into spot ETFs, which have introduced in billions from institutional buyers.
The large internet inflows into spot Bitcoin ETFs makes BTC commerce extra like a mainstream threat asset, lowering its “purity” as a bond hedge.
Quick-term shocks may also scramble the image. Regulatory surprises, liquidity squeezes, or macro shocks could transfer each gold and bitcoin in the identical course, 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 totally in favor of bitcoin? Dragosch’s reply, supported by years of knowledge, is not any. Gold nonetheless works greatest when shares tumble, whereas bitcoin could supply shelter when bonds are beneath strain. For buyers, the lesson isn’t ditching one asset for the opposite, however recognizing that they hedge completely different dangers — and utilizing each could be the smarter play.
