Gold is reaching new heights while bitcoin struggles to maintain crucial levels, rekindling a discussion among crypto investors that remains unresolved. If bitcoin is intended to be digital gold, it should be performing in this environment, but currently, it isn’t.
The discussion is intensifying as gold rises on expectations of rate cuts and geopolitical tensions, whereas bitcoin has had difficulties sustaining important psychological thresholds and is still impacted by the same factors that affect equities and other risk assets.
Gold has increased by over 70% this year, while silver, another precious metal, has surged around 150%, positioning both for their best yearly performance since 1979.
Platinum has also reached record levels, contributing to a broader rally in precious metals as investors return to these assets as a hedge against geopolitical uncertainty and long-term currency risks.
One reason bitcoin is lagging is due to positioning. The market is still adjusting after a prolonged period of leveraged trading, with each upturn quickly followed by profit-taking in the last week.
Macro factors are another impediment. Although traders anticipate rate cuts, bitcoin typically requires more definitive conditions for risk-taking rather than just a gentler policy outlook. Bond yields have fluctuated, the dollar has oscillated, and markets have consistently adopted a “preserve capital” approach, which generally benefits gold first.
David Miller, chief investment officer at Catalyst Funds and portfolio manager of the Strategy Shares Gold Enhanced Yield ETF, noted the divergence between the two is hard to overlook.
“Gold has had a record year, up over 60%. But bitcoin too. You still have this situation where it’s clearly not digital gold,” Miller remarked, adding that “gold can have a record year while bitcoin is down in the same year.”
Miller believes bitcoin can still be a valuable part of portfolios over the long term, especially as a hedge against fiscal expansion and currency depreciation. However, he contends gold serves a different purpose since it is already regarded as a reserve asset by central banks.
“What gold does that bitcoin definitely can’t is serve as an actual alternative reserve asset to a currency,” Miller stated. “Bitcoin is really a retail play, whereas gold is very much institutional.”
According to data from the World Gold Council, holdings in gold-backed ETFs have increased every month this year except May, indicating a steady accumulation rather than a fleeting trading spike. Holdings in State Street’s SPDR Gold Trust, the largest gold ETF, have grown by over 20% in 2025.
Several Wall Street banks are also optimistic going into next year. Goldman Sachs predicts prices could approach $4,900 an ounce by 2026 under its base case, with the risks leaning higher.
