Gold has once again reaffirmed its status as the premier safe-haven asset, surging nearly 10% since the beginning of 2025 and setting a new record price of $2,882 per ounce. This rally is largely attributed to escalating U.S.-China trade tensions and concerns over global economic instability.
Quick Take
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The Bitcoin-Gold ratio has fallen to 34, the lowest since November 2024, as gold prices surge.
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Gold has gained nearly 10% year-to-date, hitting an all-time high of $2,882 per ounce.
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U.S.-China trade tensions drive increased safe-haven demand for gold, with JPMorgan planning to deliver $4 billion in bullion to New York.
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Bitcoin ETF inflows surpass $4 billion but remain largely driven by arbitrage trading rather than long-term investment.
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Bitcoin remains volatile, fluctuating between $92,000 and $100,000, while altcoins face steeper declines.
Bitcoin-Gold Ratio Hits 12-Week Low
Bitcoin-to-gold ratio | Source: TradingView
The Bitcoin-Gold ratio, which measures Bitcoin’s price relative to gold per ounce, has now dropped to 34—the lowest level since November 2024. This marks a 15.4% decline from its December peak of 40, highlighting the growing divergence between the two assets.
Although Bitcoin continues to see strong institutional participation, its price remains highly volatile, making it a less attractive alternative to gold for risk-averse investors. Traditional investors view gold as a more reliable inflation hedge due to its lower volatility and long-established history as a store of value.
Gold Surges as Investors Seek Stability
The U.S. recently imposed a 10% tariff on Chinese imports, prompting Beijing to retaliate with its own sweeping set of duties on American goods. This geopolitical friction has pushed investors towards gold, reinforcing its historical role as a hedge against uncertainty. The impact has been evident in U.S.-bound gold shipments, with JPMorgan planning to transfer $4 billion worth of bullion to New York this month.
Bitcoin Struggles to Maintain Momentum
Spot Bitcoin ETF flows | Source: TheBlock
While Bitcoin has often been touted as "digital gold," recent market activity suggests otherwise. Despite inflows of over $4 billion into U.S.-listed spot Bitcoin ETFs, BTC has failed to sustain upward momentum. Analysts attribute this to arbitrage-driven trading rather than long-term investment interest.
Bitcoin’s price action has been erratic, experiencing sharp swings between $92,000 and $100,000 in the past week. Compared to gold, which continues to set record highs, Bitcoin remains 9% below its all-time peak of $108,000, reached in January 2025.
Read more: Bitcoin vs. Gold: Which Is a Better Investment in 2025?
Market Volatility and Economic Implications
US dollar index (DXY) eases from over 109 | Source: TradingView
Broader financial markets are also showing signs of uncertainty. The Cboe Volatility Index (VIX) has risen sharply in recent days, reflecting heightened investor concern. Meanwhile, the U.S. dollar index (DXY) has fallen to a one-week low, further supporting gold’s bullish momentum while putting pressure on the Bitcoin price.
Federal Reserve policy expectations are also playing a role in shaping market sentiment. Analysts have pointed to a spike in gold's one-month lease rate as a potential signal for upcoming Fed rate cuts. If the Fed pivots towards easing monetary policy, this could inject additional liquidity into markets, potentially benefiting Bitcoin alongside gold.
Can Bitcoin Still Be an Inflation Hedge in 2025?
Bitcoin historically performed well as an inflation hedge during the COVID-19 pandemic, reaching record highs amid economic uncertainty. However, in the current environment, gold appears to be the preferred safe-haven asset.
Source: X
Standard Chartered remains bullish on Bitcoin’s long-term prospects, predicting a price target of $500,000 by 2028 as institutional adoption increases and volatility decreases. If this prediction holds true, Bitcoin could eventually reclaim its reputation as a reliable hedge against macroeconomic uncertainty.
Read more: Is Bitcoin a Strong Hedge Against Inflation?
Final Thoughts
The current market environment underscores gold’s resilience as the ultimate safe-haven asset. While Bitcoin remains a speculative investment with strong long-term potential, it has yet to establish the same level of stability as gold.
As U.S.-China trade tensions escalate and economic uncertainty persists, investors may continue to favor gold in the short term. However, Bitcoin’s future could shift as ETF markets mature and institutional demand grows. For now, gold holds the upper hand in the battle of inflation hedges.
Read more: What is a Strategic Bitcoin Reserve and How Likely Is it?
