Why the price of gold is rising while Bitcoin is struggling

For years, Bitcoin has been hailed as “digital gold,” a hedge against inflation and policy excess.

Yet, as geopolitical tensions rise and trade disputes return to the headlines, the original store of value, gold, is stealing the spotlight.

According to TradingView data, gold climbed to an all-time high of $4,376 per ounce on Oct. 17, lifting its market capitalization above $30 trillion.

That makes the yellow metal roughly 14 times larger than Bitcoin’s current $2.1 trillion valuation and more valuable than all seven of the world’s biggest tech companies, including Apple, Microsoft, and Nvidia.

Year-to-date, gold has gained an astonishing 60%, easily outpacing both the S&P 500’s 14% and Bitcoin’s 17% climb.

Bitcoin, Gold, Silver, and ETH YTD Performance (Source: CryptoQuant)

Why is gold rising?

This surge follows renewed trade tensions after US President Donald Trump announced plans for tariffs on China.

The move jolted global markets and revived demand for traditional hedges. Gold, already buoyed by months of central-bank accumulation, became the go-to asset for investors seeking shelter from currency and policy risk.

Jurrien Timmer, director of global macro at Fidelity, said:

“Gold is in demand as countries strive to diversify themselves from the US reserve currency hegemony.  We can see that the share of reserve assets held in gold has been steadily increasing and is now as big as reserves held in euros. Hard money is taking share from fiat money, and the dollar is losing market share against gold.”

Gold Reserve Assets (Source: X/Timber)

Indeed, available data support that view. According to Token Terminal’s data, tokenized gold products on Ethereum have climbed more than 100% year-to-date to more than $2.4 billion.

Tokenized Gold Market Capitalization on Ethereum. (Source: Token Terminal)

This growth can be seen in Tether Gold (XAUT), whose market cap has more than doubled this year, rising from $650 million to $1.6 billion.

At the same time, the analytics platform CryptoRank estimates that inflows into gold have exceeded Bitcoin’s by over $15 trillion since January 2024, reflecting the strength of the institutional shift into the precious metal.

Bitcoin and Gold inflows (Source: CryptoRank)

Why Bitcoin is falling

The same forces pushing gold higher appear to be weighing on Bitcoin, the largest crypto asset by market capitalization.

According to CryptoSlate data, BTC price has fallen more than 4% in the past 24 hours, briefly falling to its lowest level since June at $103,300 before recovering to $106,051 as of press time.

Still, this price performance marks a 16% decline from the bellwether digital asset’s all-time high of $126,173.

Bitget Wallet CMO James Elkaleh told CryptoSlate that the market pullback reflects short-term panic, not structural weakness. He describes the dip as “early panic-induced selling” triggered by tariff-related shocks.

As a result, Coinperps data indicates that market sentiment has swung sharply back into “Fear.” Notably, this matches the levels last seen in April when Bitcoin traded below $80,000.

Crypto Greed and Fear Index. (Source: Coinperps)

Meanwhile, Elkaleh argued that Bitcoin would emerge as a winner in the politically charged market environment due to its core value proposition as a non-sovereign hedge against policy risk and currency debasement.

According to him:

“Bitcoin remains a hybrid asset. In the early phase of macro shocks, it trades like risk-on tech equity, selling off alongside other high-beta assets.

Yet as liquidity conditions improve and confidence in traditional markets weakens, it often shifts into a safe-haven role — benefiting from its fixed supply, global accessibility, and separation from state-issued money.”

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