Is Crypto Becoming the New Gold?
Since President Donald Trump began announcing tariffs, investors have been seeking safe havens for their money. Traditionally, this has meant U.S. debt backed by the full faith and credit of the U.S. government. However, in the immediate aftermath of the tariff announcements, even U.S. Treasurys were sold off.
Gold, the ancient safe haven, recently hit another record high of over $3,350 an ounce. Now, in 2025, bitcoin has emerged as a potential digital alternative. Proponents argue that bitcoin will become the future digital gold.
In recent years, bitcoin has shown significant correlation with the stock market, particularly during times of volatility. For instance, during the summer of 2022 when the Federal Reserve started raising interest rates to combat inflation, both bitcoin and the Nasdaq experienced significant declines. According to Leigh Drogen, chief investment officer at Starkiller Capital, a crypto investment firm, “We had a large decline in bitcoin associated with a pretty large decline in the Nasdaq.”
However, Drogen notes that in the past few weeks, bitcoin has shown “a significant amount of relative strength” compared to other risk assets, being “less volatile.” The price of one bitcoin was around $84,000 before the massive April 2 tariffs and has since recovered to the same level after a brief dip.
Bitcoin true believers see this as a milestone. Matt Hougan, chief investment officer at Bitwise Asset Management, compares bitcoin’s current stage to that of a teenager. “Bitcoin is 14, 15 years old, and it’s going from this early start as this risky asset to its eventual adult life as a hedge asset, just like gold,” he said.
Supporters argue that bitcoin’s limited supply makes it immune to inflationary pressures from tariffs or a decline in faith in the U.S. dollar. However, Lee Reiners at Duke University is skeptical, questioning why bitcoin should be considered a safe haven when other assets with fixed supplies, like Beanie Babies or baseball cards, are not.
Reiners also points out that bitcoin remains more correlated with risky tech stocks than with gold, warning that treating it as safer than it is could endanger the non-crypto economy.
The debate continues as investors weigh the potential of bitcoin as a safe haven against its volatility and correlation with tech stocks.
