As geopolitical tensions rise, investors are increasingly gravitating towards safer assets. Gold, a traditional safe haven, has outshined Bitcoin, particularly during recent market volatility, according to a report by Brian McGleenon for The Block published earlier today.
Meanwhile, Kitco News says gold prices have surged, bolstered by a combination of favorable external market factors and technical buying. As of 7:05 p.m. UTC on Monday, spot gold was trading at $2,470.30, up 1.63%, nearing its all-time high.
Source: TradingView
The market is also witnessing a slight dip in U.S. bond yields and higher crude oil prices, further supporting the precious metal.
In contrast, Bitcoin has struggled to maintain its position as a reliable hedge. Jasper De Maere, Head of Research at VC firm Outlier Ventures, highlighted this challenge in a recent discussion with The Block. He noted that while gold has decoupled from broader market indices like the S&P 500 and Nasdaq during last week’s selloff, Bitcoin has not fared as well, remaining closely tied to tech stocks. This correlation has led to increased scrutiny of Bitcoin’s role as a hedge.
De Maere explained that, in theory, Bitcoin, with its scarcity, should behave similarly to gold, serving as both a store of value and a potential medium of exchange. However, in practice, the 30-day correlation between Bitcoin and Ether remains above 0.95, suggesting that Bitcoin still trades more like a speculative tech stock than a stable hedge. This tight correlation, he believes, is exacerbated by the lack of regulatory clarity for crypto and the relative immaturity of the crypto market.
Despite these challenges, De Maere remains optimistic about Bitcoin’s long-term potential to become a mainstream hedge. He pointed out ongoing innovation within the Bitcoin ecosystem, particularly in institutional decentralized finance (DeFi), where Bitcoin is emerging as a viable blockchain to compete with more established ecosystems.
At the time of writing, Bitcoin is trading at $59,035, down 1.7% in the past 24-hour period (and down 11.9% in the past two-week period).
Source: TradingView
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