This year, gold has notably outperformed bitcoin in both price movement and investor sentiment, sparking discussions about the cryptocurrency’s potential to compete with established safe-haven assets. Since the introduction of spot bitcoin exchange-traded funds (ETFs) in early 2025, a significant rally was anticipated in the digital currency. However, nearly two years post-launch, gold has surged by 58%, while bitcoin has experienced a decline of approximately 12% during the same timeframe.
Mark Connors, the founder and chief macro strategist of the bitcoin investment advisory firm Risk Dimensions, believes that bitcoin still lacks the maturity necessary to rival traditional assets like gold. “The buyers that matter—central banks, sovereign wealth funds, large asset allocators—still prefer gold,” Connors stated in a recent interview. He attributes this preference not only to bitcoin’s volatility and regulatory uncertainties but also to a deeper issue stemming from its infrastructure and historical context.
Gold enjoys a long-standing trust and is entrenched in financial systems globally, with many central banks maintaining gold reserves. Unlike bitcoin, which remains largely outside these established systems, gold has a multitude of functional uses in trade. “Some of these institutions haven’t exactly called Unchained and said, ‘Can I get a wallet?’” Connors noted, highlighting the hesitancy among significant institutional players.
The evolving landscape becomes even more apparent as BRICS nations—including China, India, and Russia—have notably increased their gold reserves, even using gold for trade settlements in certain cases. This function of gold adds a layer of demand that bitcoin has yet to achieve. “There’s a trade component to gold that brings real demand,” Connors explained.
In recent months, the performance gap between the two assets has widened. Bitcoin has seen a drop of over 30% since its peak in July, while gold has ascended to over $4,100 per ounce. Connors emphasizes that this disparity is not solely driven by changing sentiments; rather, it is closely linked to broader liquidity issues stemming from U.S. fiscal policy.
During a government shutdown earlier this year, the Treasury’s balance sheet expanded dramatically, with liquidity conditions tightening across markets. Bitcoin, being highly sensitive to changes in liquidity—particularly in Asia—has faced sharp declines as a result. “When the U.S. stops spending, it affects capital flows globally,” he remarked, suggesting that the current market environment leaves risk assets like bitcoin in a precarious position.
Although the situation appears challenging, Connors suggests that it may not be permanent. He sees potential for liquidity to improve, particularly if the U.S. government begins issuing more Treasury bills to address deficit spending. Furthermore, as trust in fiat currencies diminishes—especially in emerging markets—bitcoin could gain traction as a neutral asset.
However, Connors advises against assuming a swift transition where bitcoin takes the place of gold. He emphasizes that institutional investors do not treat the two assets as interchangeable; rather, they align their investments with their mandates, which currently favor gold.
As the disparity in performance illustrates, the journey for crypto assets to become global reserve currencies may be more prolonged than anticipated—not due to technological limitations, but because building trust and changing entrenched habits is a gradual process. Connors poignantly concluded, “Gold’s been around forever. Bitcoin is still growing up.”
