Given the Trump Administration’s vocals and demonstrated support for crypto, some investors wonder about Gold’s days, as the world’s favorite hedge asset is numbered.
André Dragosch, European research manager at Bitwise Asset Management, suggests that the election is not so simple. In a x Saturday, he offered a rule of thumb: Gold still works best as protection against stock market loss, while Bitcoin is increasingly acting as a counterbalance to mitigating market stress.
Gold: Equity Hedge of Choice
The reasoning starts with the story. When stocks sell, investors often rush into gold. Decades of market data back. Gold’s long -term context with the S&P 500 is hovered near zero, and under the market stress it often dips negatively.
For example, the gold prices rose on 2022 -bear prices approx. 5%, even when the S&P 500 tumbled almost 20%. This pattern illustrates why gold is still considered the classic “safe harbor.”
Bitcoin: A bond market counterweight
Bitcoin, on the other hand, has often fought under equity panic. In 2022, it collapsed more than 60% with tech shares. But its relationship with US Treasury has been more exciting.
Several studies note that Bitcoin has shown a low or even slightly negative correlation with government bonds. This means that when bond prices sink and increase – as they did in 2023 with fear of US debt and deficit – Bitcoin has sometimes kept better than gold.
Dragosch’s Takeaway: Investors don’t have to choose one over the other. They play different roles. Gold is still the better hedge when stocks wing wing, while Bitcoin can help portfolios when the bond markets are under pressure from rising rates or fiscal concerns.
How the rule lasts in 2025
The division has been ready this year. Per. 31 August Gold rose more than 30% years to date, according to World Gold Council data. This increase reflects renewed demand during seizures of stock evolatility bound to customs, slowdown for growth and political risk.
Bitcoin has meanwhile achieved approx. 16.46% this year, based on Coindesk data, a solid performance given that 10-year-old US Treasury has fallen around 7.33%, according to Marketwatch data.
In comparison, the S&P 500 has increased approx. 10% in 2025 per CNBC data.
The divergent performance emphasizes Dragosch’s Heuristics: Gold has taken the most benefit of the stock jets, while Bitcoin has kept its land as the bond markets wing under the weight of higher yields and heavy government borrowing.
Not only meaning: Data supports it
This is not just Dragosch’s personal view. A Bitvis Research Report Earlier this year noted that gold remains a reliable cover against the downturn of the stock market, while Bitcoin has tended to yield stronger returns during recovery and show a lower connection with US Treasury. The report concluded that keeping both assets can improve diversification and optimize risk -adjusted returns.
The warnings
Correlations are still not static. Bitcoin’s ties to shares have been strengthened by 2025 thanks to large inflows to Spot -Tfs that have brought billions from institutional investors.
The huge net inflow to Spot Bitcoin ETF makes BTC act more like a mainstream risk company, reducing its “purity” as a bond hedge.
Short -term shocks can also spice up the image. Regulatory surprises, liquidity pressures or macro -socks can move both gold and bitcoin in the same direction, limiting their usability as hedges. In other words, Dragosch’s rule of thumb is precisely that-one heuristic, not a guarantee.
The lower line
Trump’s Pro-Crypto attitude raises a provocative question: Is it time to give up gold entirely in favor of Bitcoin? Dragosch’s answer, supported by many years of data, is no. Gold still works best when stocks tumble, while Bitcoin may offer shelter when bonds are under pressure. For investors, the lesson is not to grab one active for the other, but acknowledges that they are called different risks – and using both can be the smarter game.
