Can Bitcoin Outperform Gold: Investment Choices Amid Economic Uncertainty in 2025
Author: Dominic Basulto
Translated by: Baihua Blockchain
Cryptocurrency investors have long referred to Bitcoin as "digital gold." If that is the case, then Bitcoin (BTC -1.22%)—like gold—should be able to hedge against the market volatility and economic uncertainty that current investors are experiencing.
But let's take a look at the current situation. Gold prices have just surpassed $3,000, reaching an all-time high, and have risen 15% so far this year. In contrast, Bitcoin has dropped nearly 20% from its historical high of $109,000 in January.
Gold seems to be on the rise, while Bitcoin—at least at this moment—appears to be declining. So, which is the better investment choice now? The answer may not be as obvious as you think.
Bitcoin: Digital Gold or Tech Stock?
One key factor to keep in mind is the correlation between Bitcoin and the stock market. For most of its history, Bitcoin has been completely uncorrelated with the stock market, which is one reason it has been so attractive to many investors. In 2024, WisdomTree (WT -2.24%) conducted a comprehensive study on Bitcoin and found that it had almost no correlation with the stock market, except for some brief periods since 2012.
In many ways, this lack of correlation makes Bitcoin the ultimate portfolio diversification tool. Not only is Bitcoin uncorrelated with the stock market—it is uncorrelated with all major asset classes. It seems to be unique, and Wall Street also recognizes Bitcoin as a potential tool for hedging against economic uncertainty and market volatility.
However, in 2025, some very strange things are happening: Bitcoin is increasingly resembling a tech stock. More and more statistical evidence supports this view.
In March, the UK’s major bank Standard Chartered carefully studied the correlation between Bitcoin and the stock market, finding that Bitcoin's correlation with the Nasdaq is now 0.5, having reached as high as 0.8 earlier this year. Meanwhile, Bitcoin's correlation with gold seems to have diminished, now standing at only 0.2, and at one point earlier this year, it was even zero.
These numerical changes may seem small, but they are significant in the eyes of investors. This suggests that Bitcoin may no longer be a safe-haven asset. Of course, correlations can change over time, but Bitcoin is now highly aligned with the movements of tech stocks. Simply put, buying Bitcoin now is like buying a volatile tech stock. If tech stocks fall, Bitcoin will also fall; if tech stocks rise, Bitcoin will rise as well.
Gold vs. Bitcoin
Image Source: Getty Images
Any claim that Bitcoin is digital gold now seems delusional. If Bitcoin is even uncorrelated with gold, how can it be digital gold? If Bitcoin is a tool for hedging against economic uncertainty, why is its price still falling?
Where is the Economy Headed in 2025?
It is understandable that many Bitcoin investors (like tech stock investors) have begun to obsess over the latest U.S. macroeconomic data. All of this data—inflation reports, consumer confidence reports, GDP reports—is crucial for understanding the future trajectory of Bitcoin.
The potential impact of large-scale tariffs remains unknown. If these tariffs push the U.S. economy into recession while simultaneously causing prices to rise, the situation could become very dire. One could ask ChatGPT what happened when stagflation became the new economic buzzword in the 1970s.
According to conventional wisdom, if one believes the economy will fall into recession due to tariffs, one should buy gold; whereas if one believes the economy will rebound strongly due to "America First" tariff policies, one should buy Bitcoin.
Will Gold Really Outperform Bitcoin in 2025?
According to the latest economic data, Goldman Sachs predicts that by the end of 2025, gold prices could reach $3,300. This is a 10% increase from the current price of $3,000.
But guess what? Bitcoin can rise 10% within a 24-hour trading period. Achieving this performance over the next nine months seems not too difficult for Bitcoin, which has a history of triple-digit annual returns.
Therefore, even though gold now appears to be the obvious, no-brainer investment choice, and Bitcoin increasingly resembles a tech stock, I still choose Bitcoin. After all, I believe Bitcoin will outperform gold in 2025.
Article Link: https://www.hellobtc.com/kp/du/03/5732.html
Source: https://www.fool.com/investing/2025/03/28/better-buy-bitcoin-or-gold/
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