Bitcoin Underperforms Gold This Year as Investors Flock to Traditional Safe Asset Amid Heightened Geopolitical Tensions

Bitcoin, which showed a strong performance last year, is underperforming compared to Gold this year. This is because investors are flocking to the traditional safe asset

Bitcoin price is lagging behind gold price this year, despite both assets being considered as safe havens from geopolitical tensions.

While Bitcoin has only risen 3% year-to-date, gold has surged 9%, reaching an all-time high of $2,882 per ounce on Monday.

This divergence is largely attributed to heightened demand for traditional safe assets following U.S. President Donald Trump’s statement that the U.S. could occupy the Gaza Strip.

In contrast, Bitcoin remains about 10% below its annual high. On Monday, the flagship cryptocurrency was trading down 0.45% over the past 24 hours at around $96,600 on the Binance Tether (USDT) market.

Bitcoin has been touted as a digital store of value, akin to gold, due to its limited supply. However, it appears to be falling short in that role in the current scenario.

Meanwhile, gold is maintaining its status as a strong safe asset amid economic uncertainties, including the U.S.-China trade war and tariff threats.

Speaking to Bloomberg TV, Moneta Group’s Chief Investment Advisor Aoifinn Devitt said that while Bitcoin can be viewed as a hedge against fiat currencies, its appeal is reducing in the current market due to high dollar demand.

“Over time, Bitcoin may develop its own characteristics, but for now, it is still considered a high-risk asset,” Devitt added.

Still, proponents of Bitcoin expect that over time, the unique properties of the digital asset will be recognized as a store of value.

“The emergence of Exchange Traded Funds that invest directly in Bitcoin will gradually reduce volatility, and more investor funds will be attracted,” predicted Paul Howard, a Director at market-making firm Winsent.