Gold Reaches Record High While Bitcoin Declines: Reassessing ‘Digital Gold’

Gold prices have reached an all-time high, prompting discussions on Bitcoin’s future. Analysts suggest Bitcoin is acting more like a tech stock than ‘digital gold’, with significant correlation to traditional markets. Furthermore, market sentiment remains cautious, with continued outflows from Bitcoin ETFs and attention on upcoming remarks from the US Federal Reserve.

Gold has surged to an all-time high of $3,317 per ounce, marking a significant increase of 25% since the beginning of the year. This spike is attributed to rising investor anxiety amid a global economic downturn, exacerbated by ongoing trade tensions between major economies. As gold flourishes, analysts are scrutinising Bitcoin’s trajectory, pondering whether it will follow suit or remain stagnant.

Innokenty Isers, the CEO of Paybis, noted that Bitcoin finished the first quarter of 2025 with an 11.8% decline. Recent price changes indicate Bitcoin’s acute susceptibility to macro-economic influences, suggesting it is closely linked to traditional markets. A notable 0.72 correlation with the S&P 500 indicates investors are reassessing Bitcoin’s classification as ‘digital gold’ in the short term.

Further analysis reveals a low correlation of 0.2 between Bitcoin and gold, showcasing that their price movements primarily occur independently. Historically, this correlation surpasses 0.3 infrequently, emphasising Bitcoin’s current alignment with tech stocks rather than traditional safe-haven assets. Isers emphasised that Bitcoin’s characteristics are leaning away from the ‘digital gold’ narrative.

The market remains tentative as Bitcoin’s Fear and Greed Index reads 29, indicating persistent fear among investors. Despite a price uptick, Bitcoin ETFs continued to experience substantial outflows, amounting to $812.3 million in April, predominantly influenced by BlackRock’s IBIT holdings. Significant demand for Bitcoin as a safe haven has yet to materialise, as evidenced by recent observations from QCP Capital.

Investors are awaiting statements from US Federal Reserve Chair Jerome Powell, who will address the Economic Club of Chicago later today. Analysts are keen for insights regarding potential interest rate cuts and clarifications on inflation driven by tariffs. Additionally, Fed Governor Christopher Waller posits that inflationary pressures may be underestimated, leading to a cautious outlook from market proponents.

In other news, Coinbase successfully passed the SEC’s financial disclosure review without amendments, representing a regulatory success. Bybit has reversed its PAWS airdrop due to user feedback regarding allocation inconsistencies. Semler Scientific intends to expand its Bitcoin holdings through a $500 million securities offering, despite a 5% unrealised loss on previous investments. Meanwhile, local Chinese governments are reportedly liquidating seized crypto assets amid economic challenges. VanEck has proposed the introduction of “BitBonds,” merging Treasury securities with a 10% Bitcoin stake as a potential strategy for addressing the US’s $14 trillion debt refinancing challenge.