Gold Shines Amid Geopolitical Tensions as Bitcoin Fades
While Bitcoin has long been touted as “digital gold” and a hedge against inflation, the traditional store of value, physical gold, is currently outperforming amidst rising geopolitical tensions and renewed trade disputes. On October 17, gold reached an all-time high of $4,376 per ounce, boosting its market capitalization above $30 trillion, making it roughly 14 times larger than Bitcoin’s $2.1 trillion valuation. Year-to-date, gold has surged an impressive 60%, significantly surpassing Bitcoin’s 17% and the S&P 500’s 14% gains.
This surge in gold’s value is primarily attributed to US President Donald Trump’s announced tariffs on China, which rattled global markets and spurred demand for traditional hedges. Fidelity’s Jurrien Timmer notes that countries are increasingly diversifying away from the US dollar, with gold’s share of reserve assets growing to rival euros. This institutional shift is evident in tokenized gold products on Ethereum, which have climbed over 100% year-to-date to more than $2.4 billion, with Tether Gold (XAUT) alone doubling its market cap to $1.6 billion. Since January 2024, inflows into gold have exceeded Bitcoin’s by over $15 trillion.
Conversely, Bitcoin is struggling under the same macro pressures. Its price recently fell over 4% in 24 hours, hitting its lowest level since June, and marking a 16% decline from its all-time high. Bitget Wallet CMO James Elkaleh attributes this to “early panic-induced selling” triggered by tariff-related shocks, leading market sentiment to swing back into “Fear.” Despite this, Elkaleh maintains Bitcoin’s long-term potential as a non-sovereign hedge against policy risk and currency debasement. He suggests that while Bitcoin initially trades like a “risk-on tech equity” during macro shocks, it could transition into a safe-haven asset as traditional market confidence wanes, benefiting from its fixed supply and global accessibility.
(Source: https://cryptoslate.com/gold-price-outshines-bitcoin-as-geopolitical-tensions-spike/)
