Given Trump’s Pro-Crypto Stance, Is it Time to Fully Ditch Gold in Favor of Bitcoin?

Given the Trump administration’s vocal and demonstrated enactment for crypto, immoderate investors are wondering whether gold’s days arsenic the world’s favourite hedge plus are numbered.

André Dragosch, European caput of probe astatine Bitwise Asset Management, suggests the prime isn’t truthful simple. In a post connected X Saturday, helium offered a rule-of-thumb: golden inactive works champion arsenic extortion against banal marketplace losses, portion bitcoin progressively acts arsenic a counterweight to enslaved marketplace stress.

Gold: Equity Hedge of Choice

The reasoning starts with history. When equities merchantability off, investors often rush into gold. Decades of marketplace information backmost this up. Gold’s long-run correlation with the S&P 500 has hovered adjacent zero, and during marketplace accent it often dips negative.

For example, successful the 2022 carnivore market, golden prices roseate astir 5% adjacent arsenic the S&P 500 tumbled astir 20%. That signifier illustrates wherefore golden is inactive considered the classical “safe haven.”

Bitcoin: A Bond-Market Counterweight

Bitcoin, by contrast, has often struggled during equity panics. In 2022, it collapsed much than 60% alongside tech stocks. But its narration with U.S. Treasuries has been much intriguing.

Several studies note that bitcoin has shown a debased oregon adjacent somewhat antagonistic correlation with authorities bonds. That means erstwhile enslaved prices descend and yields emergence — arsenic they did successful 2023 during fears implicit U.S. indebtedness and deficits — bitcoin has sometimes held up amended than gold.

Dragosch’s takeaway: investors don’t request to prime 1 implicit the other. They play antithetic roles. Gold is inactive the amended hedge erstwhile stocks wobble, portion bitcoin whitethorn assistance portfolios erstwhile enslaved markets are nether unit from rising rates oregon fiscal worries.

How the Rule Holds successful 2025

The divided has been wide this year. As of Aug. 31, golden was up much than 30% year-to-date, according to World Gold Council data. That surge reflects renewed request during bouts of equity volatility tied to tariffs, slowing growth, and governmental risk.

Bitcoin, meanwhile, has gained astir 16.46% this year, based connected CoinDesk Data, a coagulated show considering that 10-year U.S. Treasury yields person fallen astir 7.33%, according to MarketWatch data.

The S&P 500, by comparison, is up astir 10% successful 2025, per CNBC data.

The diverging show underscores Dragosch’s heuristic: golden has benefited astir from equity jitters, portion bitcoin has held its crushed arsenic enslaved markets wobble nether the value of higher yields and dense authorities borrowing.

Not Just Opinion: Data Backs It

This isn’t conscionable Dragosch’s idiosyncratic view. A Bitwise research report earlier this twelvemonth noted that golden remains a reliable hedge against banal marketplace downturns, portion bitcoin has tended to supply stronger returns during recoveries and shows little correlation with U.S. Treasuries. The study concluded that holding some assets tin amended diversification and optimize risk-adjusted returns.

The Caveats

Still, correlations aren’t static. Bitcoin’s ties to equities person strengthened successful 2025 acknowledgment to ample inflows into spot ETFs, which person brought successful billions from organization investors.

The immense nett inflows into spot Bitcoin ETFs makes BTC commercialized much similar a mainstream hazard asset, reducing its “purity” arsenic a enslaved hedge.

Short-term shocks tin besides scramble the picture. Regulatory surprises, liquidity squeezes, oregon macro shocks whitethorn determination some golden and bitcoin successful the aforesaid direction, limiting their usefulness arsenic hedges. Dragosch’s rule-of-thumb, successful different words, is conscionable that — a heuristic, not a guarantee.

The Bottom Line

Trump’s pro-crypto stance raises a provocative question: is it clip to wantonness golden wholly successful favour of bitcoin? Dragosch’s answer, supported by years of data, is no. Gold inactive works champion erstwhile stocks tumble, portion bitcoin whitethorn connection structure erstwhile bonds are nether pressure. For investors, the acquisition isn’t ditching 1 plus for the other, but recognizing that they hedge antithetic risks — and utilizing some whitethorn beryllium the smarter play.