Investors are increasingly becoming skeptical of Bitcoin as a safe-haven asset. Instead, they’re rushing to gold because of increasing geopolitical instability and market volatility. Those recent price swings in Bitcoin have alarmed would-be investors. With recent heavy outflows from Bitcoin ETFs, many are looking to gold in search of stability. Gold’s attractiveness has been sustained and accelerated by a number of global economic issues including the renewed fears of a US-China trade war.
Gold's Resurgence
In Q1 2025, global gold ETFs experienced an astonishing net inflow of $21.1 billion. This historic demand is irrefutable proof that consumers everywhere are clamoring for the precious metal. This unprecedented demand arrives as Bitcoin seeks to continue proving itself as a sound long-term asset. Earlier this week, gold prices jumped to a record high of $3,660 per ounce. This increase further underscores how popular it has become with investors.
The global trade war started by President Trump has added to that economic uncertainty. Consequently, several investors have started to play gold market. In this uncertain market, investors are looking for safe-haven assets that can protect and preserve their capital through this storm. Gold, it seems, has edged out the rest as everyone’s favorite.
Bitcoin's Struggles
Bitcoin’s price trajectory has always been a rollercoaster of ups and downs. Its price now fluctuates in the $85,000 range, a drop of more than 20% from its January high of $109,000. Benchmark cryptocurrency bitcoin even topped gold ETFs in trading volume for a period in late 2024, though that edge evaporated just as fast.
This would be the first time Bitcoin has dealt with three months in a row of ETF outflows, a strong sign of poor investor sentiment. Since January, Binance Futures has experienced record negative net flows. This trend is a sign that traders are either closing their positions or simply reducing their exposure, resulting in reduced speculative trading activity.
Expert Analysis
"Bitcoin's volatility and correlation with equities raise questions over its 'digital gold' narrative" - JPMorgan analysts
As JPMorgan’s commodities analysts recently noted, the demand for gold has surged. Investors are increasingly jumping on board with it instead of Bitcoin as they look for a safe-haven asset. Bitcoin's long-term role remains uncertain, and its ability to reinvent itself will be crucial for its future success.
