Why is the price of gold rising to the sky while Bitcoin is struggling to fall?

Over the years, Bitcoin has often been praised as “digital gold” – a hedge against inflation and excessive monetary policies.

However, as geopolitical tensions rise and trade disputes return to the headlines, the asset that retains its original value – gold – is once again in the spotlight.

According to data from TradingView, the price of gold reached a new historical high of 4,376 USD/ounce on October 17, raising the total market capitalization to over 30 trillion USD.

Gold price chart 2h | Source: TradingViewThis means that this precious metal is approximately 14 times larger than the current value of Bitcoin (2,1 trillion USD) – and even larger than the total value of the 7 largest tech giants in the world, including Apple, Microsoft, and Nvidia.

Since the beginning of the year, gold has increased by up to 60%, far exceeding the 14% increase of the S&P 500 index and the 17% of Bitcoin.

Why did gold increase significantly?

This surge occurred after U.S. President Donald Trump announced a plan to impose tariffs on Chinese goods – a move that shook global markets and rekindled demand for traditional safe-haven assets.

Gold, which has been supported by many months of accumulation by central banks, quickly became a favored safe haven for investors concerned about exchange rate risks and policy.

Jurrien Timmer, Global Macro Strategy Director at Fidelity, commented:

“Gold is being sought after as many countries strive to escape the dominance of the USD in foreign exchange reserves. The share of global reserves held in gold has steadily increased and is now nearly equivalent to the amount held in euros. Hard money ( is gaining market share from fiat currency, and the USD is gradually losing its position compared to gold.”

Market data also supports this viewpoint. According to Token Terminal, the value of tokenized gold on Ethereum has increased by over 100% since the beginning of the year, reaching over 2.4 billion USD.

Among them, Tether Gold )XAUT( is a prominent example – its market capitalization has doubled from 650 million USD to 1.6 billion USD just this year.

The CryptoRank analysis platform estimates that the capital flow into gold since January 2024 has exceeded Bitcoin by more than 15 trillion USD, reflecting a strong shift of institutions towards precious metals.

) Why is Bitcoin dropping?

The very factors that are driving gold up are also putting pressure on Bitcoin – the largest market-cap crypto asset.

According to data from CoinPhoton, the price of BTC has increased slightly by 0.4% in the past 24 hours, at one point touching the lowest level since June at 103,300 USD, before recovering to around 107.00 USD at the time of writing.

Since the historical peak of 126,173 USD, Bitcoin is currently down about 16%.

James Elkaleh, the marketing director of Bitget Wallet, stated that this correction reflects “short-term fear” rather than a structural weakness. He describes it as an “early sell-off due to panic sentiment,” stemming from the tariff shock.

Data from Coinperps shows that the Fear and Greed Index ###Crypto Fear & Greed Index( has returned to the “Fear” zone - equivalent to the psychological level seen back in April when Bitcoin fell below 80,000 USD.

However, Elkaleh believes that Bitcoin will ultimately prevail in a politically volatile environment, thanks to its sovereign-free nature and its role as a hedge against policy risks and monetary inflation.

He added:

“Bitcoin is still a hybrid asset. In the early stages of macro shocks, it tends to trade like high-risk tech stocks – being sold off along with other large beta assets. But as liquidity improves and confidence in traditional markets weakens, Bitcoin often transforms into a safe-haven asset – thanks to its fixed supply, global accessibility, and separation from state-issued monetary systems.”

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