Gold or Bitcoin? The precious metal puts BTC ‘to shame’ with divergence 
Finance Mar 19, 2025 Share
Gold has surged to fresh record highs, leaving Bitcoin (BTC) trailing behind, with a growing divergence in performance between the two assets.
At press time, gold is trading above $3,036 per ounce, marking a strong 15% increase year-to-date (YTD). In contrast, Bitcoin has dropped 11% since the start of the year, trading at $83,517, highlighting a sharp discrepancy in returns.
Bitcoin and Gold year-to-date chart. Source: TradingView
The widening gap has prompted several strategists to suggest that the tide is turning decisively in favor of gold, as mounting macroeconomic uncertainties and escalating geopolitical tensions drive investors back toward the traditional safe-haven asset.
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Gold is putting Bitcoin to shame right now pic.twitter.com/9bc3T4U6xH
— Rex (@R89Capital) March 18, 2025
Why Gold is outshining Bitcoin
Several factors have contributed to gold’s bullish momentum. A key driver has been significant inflows into gold exchange-traded funds (ETFs), along with its traditional role as a safe-haven asset during geopolitical uncertainty.
According to the World Gold Council, global physically backed gold ETFs saw significant inflows in February, totaling $9.4 billion, the strongest since March 2022, with analysts anticipating gold-backed ETF investment trusts to see ample scope for fresh inflows.
Geopolitical tensions have further fueled gold’s rally. President Donald Trump’s aggressive trade policies, including new tariffs on China, Mexico, and Canada, have heightened fears of a global economic slowdown.
The escalating trade standoff has raised concerns over rising consumer prices and broader economic instability, prompting investors to flock to gold as a hedge.
Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs, also attributed the rally to heightened uncertainty surrounding US-led tariff policies, coupled with inflation concerns.
Struyven noted a divergence across commodity markets, with gold and copper strengthening amid tariff-related pressures, while oil prices weaken due to fears over slowing US and global economic growth.
Adding further support, Struyven noted that central banks have ramped up gold purchases at rates seven times higher than pre-2022 averages, driven by concerns over the stability of the US dollar and broader geopolitical risks.
Interestingly, the rally has gathered momentum despite a decline in speculative positioning. ETFs and institutional investors have added nearly 100 tons of gold demand over the past month, making the bullish case even stronger.
Bitcoin’s bleak performance and ETF outflows
While gold shines, Bitcoin has struggled to maintain its footing. Bitcoin ETFs saw $978 million in outflows last week, bringing total outflows over the last five weeks to $5.4 billion, according to a CoinShares report.
Despite Trump’s pro-crypto moves, including signing an executive order to establish a strategic crypto reserve, Bitcoin has come under sustained pressure. The administration’s unpredictable tariff announcements have rattled broader market confidence, prompting sell-offs in risk-on assets like Bitcoin and Nasdaq-listed tech stocks.
Is Bitcoin’s bull run over?
Historically, Bitcoin and gold have rarely moved in tandem. During the banking crisis of 2023, Bitcoin’s correlation with gold strengthened as speculators flocked to store-of-value assets.
However, in 2025, the narrative has changed. Gold’s rally has driven its price 40% higher year-over-year, far surpassing Bitcoin’s 23% gain over the same period.
Bitcoin $100,000 May Be a Risk-Off Bell Ring – The 'why buy #gold' mantra, with the #stockmarket and #Bitcoin having rapidly risen amid elevated US rates, could be shifting. That the S&P 500's first 10% drawdown since 4Q23 coincided with about a 25% drop in the crypto and gold… pic.twitter.com/M6vJpEpuiB
— Mike McGlone (@mikemcglone11) March 18, 2025
Commodity strategist Mike McGlone also weighed in on the shifting market dynamics. In a recent post, McGlone noted that as both the stock market and Bitcoin rallied amid elevated U.S. interest rates, the traditional ‘why buy gold narrative was pushed aside.
However, the S&P 500’s first 10% correction since late 2023, coupled with Bitcoin’s sharp 25% drop and gold’s rise above $3,000 an ounce, indicates that investor sentiment is shifting back to safe-haven assets, with gold reclaiming its dominance.
Featured image via Shutterstock