Biweekly Market Update: Can Digital Gold Ever Replace the Real Thing?

Since Bitcoin’s all-time high (ATH) on January 19, 2025, just prior to Donald Trump’s inauguration as the 47th US president, financial markets have done an unanticipated 180. Instead of seeing the continued surges of cryptocurrencies and equities we saw throughout 2024, growing global uncertainty has led to the emergence of an older, less discussed contender. As traditional investment sectors slow, gold has surged past $3,000 per ounce to a new ATH.

This unprecedented surge is largely being driven by heightened geopolitical tensions and economic instability, which historically have prompted investors to increasingly turn to gold as a secure asset during times of fear.

Gold has repeatedly gained value during times of crisis and economic uncertainty. With the forecast for the near future no less cloudy, many investors are choosing to go with physical gold, rather than its digital counterpart. We’ll explore how long this trend can continue, and whether this turn of events is only just getting started.

Gold's Resilient Performance

Gold hit a record $3,000 per ounce on Mar 17, 2025, marking a 16% rise this year. Notably, ANZ Bank has raised its six-month gold forecast to $3,200 per ounce, anticipating continued strength in the market.

Recent geopolitical events have further reinforced the perception that betting on physical gold is a wise choice. Gold is considered a safe haven in this kind of global climate because it retains intrinsic value, isn’t tied to any single government or currency and has historically appreciated during periods of inflation and financial instability. When there are fears of war, investors flock to gold as a hedge against market volatility, as it provides a stable store of value when cryptocurrencies, stocks and fiat currencies become more unpredictable.

The ongoing trade tensions initiated by President Donald Trump's tariff policies have contributed to economic instability. Additionally, there are ongoing Middle East conflicts, as well as a continued war between Russia and Ukraine that has gone unresolved (despite Zelenskyy’s recent visit to the White House).

Since October 2022, gold’s value has surged 86%, averaging a 2.97% monthly gain. In the 21st century, the only sustained period that rivaled this level of growth was during the Great Recession and housing collapse, which demolished stock markets between 2008 and 2011. Meanwhile, Bitcoin and other cryptocurrencies have taken a step back — something that should be considered healthful, and isn’t unusual after hitting record highs.

Gold’s big rise this year shows that people still trust it during tough times. However, that doesn’t mean Bitcoin is out of the picture. While gold provides safety, Bitcoin still offers something different — especially for younger investors and people who believe in the future of digital money.

The opposing directions of these markets highlight the enduring stability of gold as compared to the volatility of cryptocurrencies when times become uncertain. The contrast between gold and other markets raises questions about how long this trend will continue.

Crypto Community Responds to Gold’s Breakout

As crypto traders see their portfolios shrink, many are shifting their views. Those who have sat and waited for precious metals to have their own turn in the sun are being vocal about the inevitability of this trend. Some traders have criticized prominent Bitcoin advocates, such as Michael Saylor, who remains committed to accumulating Bitcoin despite the market downturn.

A sector is only a “safe haven” if traders perceive it that way. Valid arguments will always exist that owning a physical commodity such as gold offers a distinct advantage over something that can only be accessed digitally. If the internet or digital systems were ever to be disrupted — whether by cyber attacks, power outages or government controls — then accessing cryptocurrency could become difficult or even impossible.

While this may not seem likely today, history shows that technology isn’t always reliable. On the other hand, physical assets like gold don’t depend upon the internet or digital networks, making them much more secure in times of crisis.

Although gold’s upsides are clear in times like the present, it doesn’t mean people are giving up on crypto. Bitcoin still has a strong community, and history shows that quieter times in crypto sometimes set the stage for big moves later. Markets don’t always act as we expect, but they usually move in cycles — and crypto has experienced many comebacks after slow periods.

Is this a sign that cryptocurrencies can play catch-up?

There’s been a growing narrative within the cryptocurrency community that crypto is bound to follow gold’s lead, enjoying its own relief rally later this year as profits redistribute from physical gold to “digital gold.” But not everyone agrees with this logic, and some say the two assets don’t always move in sync.

Some traders believe that Bitcoin might follow gold and rise again later this year. Others aren’t so sure, and think it’s just a coincidence that both markets were strong in 2024. But if crypto’s history tells us anything, it’s that it tends to bounce back when the spotlight moves away. Many believe it’s not a matter of “if” but “when.” Meanwhile, conversations across social media have really picked up toward gold.

High Interest Level in Gold is Mainly Neutral for Crypto Markets

When gold receives a lot of attention, crypto sometimes takes a back seat. This doesn’t mean it’s over for Bitcoin or other cryptocurrencies — it just means traders are focusing on gold right now. These things tend to go in waves. What’s hot today may cool off tomorrow, and vice versa.

The relationship between cryptocurrency and precious metals has been cyclical throughout the past decade. Typically, the times when gold, silver and index funds that represent these precious metals have dominated the social narrative have coincided with fascinating tops for cryptocurrency. Take this chart below, which compares the social volume of the term “cryptocurrency” vs. the terms “gold,” “silver,” “gdx” and “sivr”:

Both in March 2024 and late January 2025, we saw tops for cryptocurrencies just as this combined precious metals discussion was outpacing that for cryptocurrency. Though this is far from a perfect signal for tops and bottoms, it does potentially provide a free window into seeing when retail traders may be turning their attention to other sectors at an increased rate.

Bitcoin's Key Stakeholders May Drive the Next Move

Even with prices dropping, some of the biggest Bitcoin holders (people who own 10 or more BTC) have started buying again. These large holders, also called whales and sharks, often buy when prices are low and help push the market up. Their quiet confidence might be a sign of what’s coming next.

After reaching an ATH of $109,071 on Jan 19, 2025, Bitcoin's value declined by as much as 25% before rebounding recently to almost $87,000. This volatility has been particularly challenging for new investors, who had been used to nothing but bullish momentum when they entered the crypto market in late 2024.

We do see that the key stakeholder tier for Bitcoin (those who hold 10 or more BTC) have resumed their accumulation, now that prices have fallen significantly. Regardless of what retail is doing, and how much gold’s impressive performance is posing a distraction, the reality is that these whale and shark addresses are the ones that have historically pushed market values across crypto higher and higher.

Signs of What’s to Come For 2025?

Gold is shining right now because people can hold and trust it. But Bitcoin still retains its role as “digital gold.” It may not be as steady during global worries, but it offers big rewards for those who believe in it and are willing to wait. While gold offers historical safety and physical security, Bitcoin represents a newer kind of value for the digital age. In an uncertain world, holding both assets may be a smart and balanced choice.

Regardless, the recent trends in gold and Bitcoin prices highlight the enduring strength and stability of gold as compared to the fluctuating nature of cryptocurrencies. This distinction underscores why, despite the rise of digital assets, gold remains an irreplaceable component of a balanced investment portfolio. As we move through 2025, both assets may find their own ways to thrive — gold through its history, and Bitcoin through its innovation.

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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.