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Bitcoin Update: Why BTC Is Lagging Gold — and Why Bulls Say the Story Isn’t Over
What to Know
Bitcoin has so far failed to behave as an inflation hedge or safe-haven asset, significantly underperforming gold during a period marked by high inflation, geopolitical conflict, and interest rate uncertainty.
While critics see this as a breakdown of Bitcoin’s “digital gold” narrative, long-term advocates argue the weakness is temporary and driven by supply dynamics, investor psychology, and BTC’s correlation with risk assets.
Many proponents believe Bitcoin is deeply undervalued relative to macro conditions and expect a delayed capital rotation once traditional hard assets become overcrowded.
Bitcoin (BTC) is facing one of the toughest narrative tests in its history. Long promoted as “digital gold,” the cryptocurrency has struggled to live up to its reputation as a hedge against inflation or a safe haven during times of global uncertainty.
Over the past year, gold has surged more than 80%, benefiting from persistent inflation, geopolitical tensions, and shifting expectations around global interest rates. Bitcoin, by contrast, is down roughly 14% year over year, a divergence that has reignited debate over its role in modern portfolios.
In theory, assets designed to protect purchasing power should rise when fiat currencies lose value. For gold and other precious metals, that logic has held. For Bitcoin, it hasn’t — at least not yet.
This performance gap has led many investors to ask a blunt question: Why buy Bitcoin now when gold, silver, and even equities are delivering stronger returns?
According to several long-time Bitcoin supporters, the answer lies beneath the surface.
Comfort in the Familiar
Jessy Gilger, senior advisor at Gannett Wealth Advisors, argues that gold’s rally is less about fundamentals and more about instinct.
In times of fear, institutions gravitate toward assets they understand. Gold has thousands of years of history, while Bitcoin — despite operating flawlessly at a protocol level for more than 15 years — still represents a technological shift many investors are slow to embrace.
Gilger points to extreme deviations in the gold-to-Bitcoin ratio, suggesting the current imbalance is historically abnormal. From his perspective, Bitcoin’s fixed supply and digital efficiency make it a superior long-term hard asset, and a reversion to the mean is likely once market psychology stabilizes.
A Supply Event, Not a Demand Problem
Mark Connors, CIO of Risk Dimensions, rejects the idea that Bitcoin’s weakness signals fading interest.
Institutional demand, particularly through spot Bitcoin ETFs, remains strong. However, that demand is being absorbed by a massive wave of selling from early adopters who accumulated BTC years ago at far lower prices.
Rather than pushing prices higher, ETF inflows are facilitating a transfer of ownership — from early holders to institutions. According to Connors, this supply redistribution is masking demand strength and temporarily capping price performance.
The “Tech Stock” Effect
Charlie Morris, CIO at ByteTree, highlights another factor: correlation.
Bitcoin continues to trade more like a technology asset than a traditional safe haven. During periods of stress centered in the “real world” — wars, energy shocks, geopolitical instability — gold tends to outperform, while Bitcoin moves in step with internet stocks.
From this perspective, Bitcoin isn’t failing; it’s behaving exactly as it always has.
A Delayed Rotation?
Peter Lane, CEO of Jacobi Asset Management, acknowledges that Bitcoin has not passed the inflation-hedge test during recent stress events. Gold and silver have clearly dominated in 2025.
Still, Lane believes investor familiarity plays a decisive role. Precious metals remain the default choice in uncertain times, but he expects Bitcoin to benefit from a delayed rotation once confidence returns and valuations in traditional hard assets become stretched.
Searching for the Next Demand Driver
Anthony Pompliano, Chairman and CEO of ProCap Financial, notes that Bitcoin’s success as an inflation hedge over the past five years may not be enough in a shifting macro environment.
If deflationary pressures emerge, Bitcoin will need new demand narratives — such as monetary sovereignty, settlement infrastructure, or balance-sheet adoption — to fuel the next phase of growth.
“Bitcoin Isn’t a Hedge — It’s the Solution”
Others reject the criticism outright.
David Parkinson, CEO of Musquet, argues that Bitcoin was never meant to be a short-term hedge. Its fixed supply, expanding network, and increasing global relevance position it as a permanent alternative to inflationary monetary systems.
From this long-term view, gold’s rally is temporary — Bitcoin’s role is structural.
Bitcoin’s Moment May Still Be Ahead
Andre Dragosch of Bitwise attributes gold’s dominance to “muscle memory.” Investors instinctively flock to familiar assets first, even if alternatives offer better long-term characteristics.
Dragosch points out that Bitcoin is currently trading at valuation levels last seen during the 2022 FTX collapse — relative to gold. Given global money supply growth and macro conditions in 2026, he believes Bitcoin is significantly underpriced and poised to catch up once capital rotates.
Bottom Line
Bitcoin’s underperformance against gold has challenged its narrative — but not its fundamentals. Whether BTC ultimately fulfills its promise as “digital gold” may depend less on economics and more on time, adoption, and investor psychology.
For now, Bitcoin waits. Its supporters remain confident the catch-up trade is coming.$BTC
