Gold Hits All-Time Highs While Bitcoin Disappoints: Did Fed Chair Jerome Powell Jinx The 'Digital Gold'?

Bitcoin BTC/USD is underperforming against gold, which hit a record high on Thursday, calling its value proposition of ‘digital gold’ into question.

Back in December 2024, Federal Reserve Chair Jerome Powell spoke at the DealBook Summit, stating that Bitcoin is "a speculative asset, much like gold, but digital."

He dismissed the notion of BTC being a true currency, citing its volatility and lack of widespread adoption for payments or as a reliable store of value.

Since then, the divergence between Bitcoin and gold has widened.

BTC briefly touched $85,000 in recent trading before falling back to $80,000, mirroring the Nasdaq (-1.7%) and S&P 500 (-1.2%) losses. In contrast, gold GLD has surged 1.5% to a record high near $3,000 per ounce.

Since the Nasdaq's peak three weeks ago, it has fallen nearly 15%, while Bitcoin has dropped 20%.

Gold, however, has gained around 1%, following a pattern observed in mid-2024 when it outperformed as stocks and crypto traded sideways.

Shifting Sentiment

ETF flows highlight a growing shift in investor preference:

Gold ETFs have seen their largest inflows since early 2022, adding 3 million ounces.
U.S.-listed spot Bitcoin ETFs have suffered $5 billion in outflows since February—their worst streak ever.

CoinShares' latest digital asset fund flows report shows digital investment products recorded their fourth straight week of outflows, totalling $876 million, with Bitcoin alone seeing $756 million in withdrawals.

Also Read: The Trump Bitcoin Effect: Why Is BTC Performing Worse Compared To Trump’s First 100 Days In 2017?

What's Next: Bitcoin's 12.3% decline versus gold's 13.5% gain underscores their differing risk profiles—gold remains a stability play, while BTC faces higher volatility.

However, with Donald Trump pushing pro-crypto policies, including efforts to regulate digital assets and establish a strategic Bitcoin reserve, analysts expect renewed momentum.

Standard Chartered predicts Bitcoin could hit $200,000 by year-end, defying concerns over Trump tariffs and recession fears.

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