A once-tight relationship between gold and bitcoin has begun to separate in 2025, with the gold price rising more than 22 per cent for the year to date (ytd).
By contrast, Bitcoin is down more than 11 per cent ytd.
The divergence ends a period of strong correlation between the two assets, which had moved in near-lockstep from late 2022 to 2024.
Between November 2022 and November 2024, gold gained 67 per cent and bitcoin surged nearly 400 per cent, as investors sought hedges against inflation and currency depreciation.
But as market conditions shift, the underlying drivers of these assets have begun to pull them in opposite directions.
According to TJM Institutional Services managing director Jim Iuorio, bitcoin’s recent weakness can be attributed to two primary factors.
“First, much of the positive news that fuelled its rise had already been priced in by the time bitcoin reached its peak of $109,000 in mid-January,” he said.
“The adage ‘buy the rumour, sell the fact’ often holds true in financial markets, where speculators buy into an asset ahead of anticipated news and then sell once the news is confirmed.”
In contrast, gold’s resilience has been driven by geopolitical tensions, inflationary pressures, and record-breaking central bank purchases.
“Economic uncertainty has traditionally pushed investors towards gold as a safe haven, a trend that has clearly gained traction,” Luorio said.
“Additionally, the Federal Reserve’s potential shift toward easing monetary policy, rather than tightening, has further bolstered gold’s appeal.”
While bitcoin is still establishing its reputation as a store of value, gold’s 5000-year history continues to offer investors proven protection.
“If bitcoin is in a period of weakness, investors seeking safety and stability might turn to gold,” Luorio said.
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