Why is Bitcoin continuing to fall while gold is hitting new highs?

Author: Mat Di Salvo

Editor: far@Centreless

Abstract

For some investors, Bitcoin may be considered "digital gold," but recently its performance has not mirrored that of actual gold—especially as gold has reached new highs.

Gold prices continue to climb to new highs, while Bitcoin has seen a significant drop over the past month – all of this occurring amidst geopolitical risks and President Trump's aggressive trade policies shaking the financial markets. Although Bitcoin is often described as "digital gold," its trading behavior is not akin to that of real gold. Instead, as macroeconomic uncertainties cause panic among traders, Bitcoin's trading trend aligns with that of the U.S. stock market – particularly technology stocks.

However, gold, as a traditional safe-haven asset, hit a historic high of over $3,047 per ounce following the news of the ceasefire breaking between Israel and Hamas on Tuesday. In contrast, CoinGecko data shows that Bitcoin has dropped nearly 3% in the past 24 hours. The situation has been even worse in the past month: Bitcoin's price has plummeted more than 15%.

Currently, the trading price of Bitcoin is $81,967 per coin, nearly 25% lower than its historical high of $108,786 set on the day President Trump was inaugurated. The new president promised during his campaign to support the digital asset industry and cut regulations. Although the president has so far kept his promise—signing an executive order to establish a strategic Bitcoin reserve and taking other measures to support cryptocurrency—the unpredictable announcements of tariffs on major trading partners have caused panic among traders, leading to a sell-off of "risk appetite" assets, including Bitcoin and top tech stocks listed on Nasdaq.

The price of Bitcoin used to move in line with gold. During the banking crisis of 2023, the correlation between this largest cryptocurrency and tech stocks decreased, and as speculators flocked to value storage investments, Bitcoin began to fluctuate in sync with precious metals.

Although the situation may not be the case today, Bloomberg ETF analyst Eric Balchunas stated to the media that Bitcoin still needs time to mature in order to form a more predictable market trend.

"It's still too young to stabilize," he said. "Because it contains all the potential for growth, I think its performance is like a tech stock."

Will Bitcoin ultimately realize the "digital gold" potential described by its supporters? At least for now, its performance still resembles that of a completely different asset.