Bitcoin and gold's paths diverge as Trump tariffs trigger market rout

As US President Donald Trump's eye-watering tariffs tanked the world's markets, the paths of two alternative assets diverged.

As US President Donald Trump’s eye-watering tariffs triggered a tanking of the world’s markets in the past week, the paths of two alternative assets diverged.

One was gold, which hit a new high of US$3,132.43 per ounce, then faltered during the extreme sell-offs, and then rose back to above US$3,100 on Thursday (Apr 10). The other, cryptocurrencies, joined the global market rout, with Bitcoin sinking 28 per cent lower than its January peak.

But prior to the recent volatility, crypto – especially Bitcoin – was seen as a potential challenger to gold’s long-held role as a store of value.

Crypto got a leg-up with US President Donald Trump’s creation of the Bitcoin Strategic Reserve and the US Digital Asset Stockpile in early 2025.

Under an executive order in March, Washington started consolidating cryptocurrencies seized through criminal and civil forfeitures, gathering them as a reserve asset in a move that mirrored the stockpiling of gold.

But investors seeking diversification wonder: Would crypto truly rival gold’s timeless appeal?

Ilan Solot, senior global markets strategist of Marex, says: “At this point, Bitcoin is probably best thought of as an emerging store-of-value asset which – for those who believe in it – can be acquired at an early stage in its maturity cycle.”

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He adds, however, that the recent plunge in crypto prices shows its high correlation with the equity market during times investors are risk-averse – which makes it unlike gold.

Gold and cryptocurrencies are sometimes compared to each other because they are alternative assets that offer hedges against inflation and traditional market shocks, and because they share characteristics such as scarcity and the potential to hold value over time.

Investors concerned about counterparty risks would note that both assets allow for self-custody, independent of any single entity; they are also viewed as cushions against traditional, centralised financial systems’ risk of collapse.

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Here’s how they compare:

How much gold and Bitcoin are out there?

Gold is a rare metal that presents only in small amounts in the earth’s crust. Bitcoin, designed to mimic gold in the digital age, is capped at only 21 million coins by the algorithm.

As of end-2024, the amount of total above-ground gold stood at 216,265 tonnes. Based on the spot gold price of US$3,033.07 an ounce in Asian morning trade on Thursday, the world’s mined gold is worth US$23.8 trillion. In comparison, the total worth of the world’s cryptocurrencies stands at US$2.6 trillion.

The limited supply of cryptocurrencies offers a “shield against inflation and irresponsible monetary or fiscal policy”, says Marex’s Solot, adding that this trait attracts investors concerned about fiat currency risks, geopolitical tensions and capital controls in emerging markets.

Lasanka Perera, chief executive officer of Independent Reserve (the first cryptocurrency exchange licensed by the Monetary Authority of Singapore), notes that although Bitcoin is a computationally scarce asset, it is easy to acquire, store and transfer across borders at any time. These attributes give it a “massive advantage” in the race to be regarded as “digital gold” in a global and digital economy.

Charu Sethi, president of NFT (non-fungible token) infrastructure Unique Network sees a positive future for the blockchain industry because of its “intrinsic value”, despite the current volatility of cryptocurrencies.

“I really look forward to what comes out of Trump’s industry-forward regulations after the phases of volatility amid speculations,” she adds.

What is the implication of a Bitcoin reserve?

While gold has established itself as a safe-haven asset, crypto is often seen as the opposite.

The Trump administration’s setting up of the digital asset reserve “massively boosted crypto’s credibility”, says Independent Reserve’s Perera. “It’s a signal to investors that governments might treat Bitcoin like a commodity or reserve currency, not just a speculative asset class.”

However, while the move legitimises Bitcoin, boosts investor confidence and puts pressure on foreign entities to adopt a similar stance, it could well dent crypto’s appeal of being decentralised; critics are concerned about governmental control and perception of the industry, says Marex’s Solot.

He adds: “The way in which the reserve was announced got mixed reactions, especially after Trump