Crypto asset management firm NYDIG examined the performance of Bitcoin and gold in light of recent global market fluctuations.
This analysis, written by Greg Cipolaro, Global Research Director at NYDIG, takes an in-depth look at why investors turn to gold during times of heightened geopolitical tensions, and why Bitcoin continues to be under pressure in the short term.
US President Donald Trump’s threat of new tariffs on European countries and geopolitical rhetoric centered on Greenland triggered a sharp wave of “risk aversion” in global markets over the weekend, according to an analysis. During this period, US futures indexes fell, volatility increased, and crypto markets lost value, while gold prices rapidly rose towards historic highs. After that, market concerns temporarily eased as President Trump’s statements softened, but it was noted that President Trump’s sudden policy announcements still had a strong short-term impact on the virtual currency market.
NYDIG’s analysis said that while Bitcoin is theoretically considered a hedge against geopolitical and macroeconomic uncertainties, in practice it still behaves like a risk asset. The 90-day correlation between Bitcoin and U.S. stocks is about 0.51, Cipolaro said. This suggests that when market stress increases, Bitcoin will be sold off along with stocks, making it less effective as a macro hedge.
The report acknowledges that Bitcoin has made significant strides among institutional investors with the introduction of spot ETFs, but points out that gold still holds a more established position. While gold has been positioned as a strategic asset in portfolios for decades, Bitcoin is still considered a tactical and limited investment by most institutions. This situation results in capital flowing primarily into gold during periods of uncertainty.
According to NYDIG, in stressful market environments, liquidity needs become a determining factor, and this dynamic works against Bitcoin. Because Bitcoin has high liquidity available 24/7, investors are quick to sell their Bitcoins for cash. Gold, on the other hand, acts as a “liquidity pool” during such periods, providing a more stable safe haven for your portfolio.
The analysis pointed out that one of the key differences between gold and Bitcoin is the time horizon. As long as the market assesses current geopolitical risks as temporary and manageable, gold is preferred as it is more effective against short-term uncertainty. BTCOn the other hand, their main strength is as a hedge against long-term financial turmoil, declining confidence and systemic risks, so they gain importance over years rather than weeks.
NYDIG noted that recent selling by large Bitcoin holders is also putting pressure on prices. In addition to large wallets that have sold billions of dollars in the past, there are also wallets that have been held for a long time. BTC It has been migrated to exchanges in recent weeks. Conversely, as central banks continue to purchase gold, the divergence between the two assets is deepening.
On the other hand, the recent setback in the US crypto bill has also had a negative impact on market sentiment. The stalling of the market structure bill in the Senate and criticism of it by Coinbase CEO Brian Armstrong indicate that regulatory uncertainty will persist in the short term.
All of these factors are causing Bitcoin to underperform compared to gold in the short term, according to NYDIG. However, Cipolaro said the long-term investment theory remains valid. BTCThe structural role of is likely to become clearer over time.
*This is not investment advice.
