Gold Crushes Bitcoin As 2025’s True Inflation Hedge
This year should prove once and for all that gold is definitely the preferred hedge against inflation and, for global institutional investors, a better way to play against declining dollar values.
China and India central banks have added gold to their reserves. Other emerging market central banks have also been buyers of gold, not Bitcoin. Investors here that were worried about tariffs pushing inflation well over 3% have also been buyers. And for this reason, the SPDR Gold Trust (NYSE: GLD) exchange traded fund is up over 40% year-to-date while Bitcoin (CRYPTO: BTC) is up 19%. Despite hitting an all time high this year, Bitcoin just does not come close to gold.
“Gold’s surge past $3,650 per ounce reflects its enduring appeal as a safe-haven asset,” said Ben Caselin, Chief Marketing Officer at VALR, a seven year old cryptocurrency exchange based in Johannesburg.
“Equities are riding the wave of robust tech earnings and anticipated liquidity boosts. Bitcoin, meanwhile, struggles to break free from its $115,000 range, weighed down by cautious market sentiment and capital rotation toward altcoins,” Caselin said about why Bitcoin trails gold at a time when the market is still inflation-wary.
Gold is trusted more as “the stable hand” in managing price risks. Bitcoin has been around for less than 20 years and, arguably, has only been somewhat of a serious investment vehicle for the last 10. Only in recent years has Bitcoin been called “digital gold,” thanks to the predetermined supply of 21 million coins and independence from central government control.
Most people felt the serious impacts of inflation during the pandemic, with government spending and record money printing by the Federal Reserve leading to 40-year high inflation levels of more than 9%, even higher for some items. Inflation has since fallen to about 2.7% over the last 12 months, but this is compounded on top of the 9%-plus from previous years, meaning prices have gone in one direction – skyward. Inflation chips away at the value of savings and low interest yielding bonds. That’s why investors have historically purchased gold.
“Bitcoin’s long-term thesis as a store …
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