The first quarter of 2025 showed a striking contrast between two popular investment options: Gold and Bitcoin (BTC). While gold shone with an unprecedented increase of almost 20%, and reached a new all-time high (ATH), BTC performed its worst first quarter since 2018.
Investors flee to gold
The price of gold reached a record high of $ 3,167 per ounce (about 28 grams) in March. This sharp increase was fed by worries about geopolitical tensions, such as the rates war that Trump is currently feeding. When there is uncertainty, people flee to gold.
According to a report from State Street Global Advisors, no less than 155 tonnes of gold was added to global Exchange Traded Funds (ETFs) in the first quarter. This marks the strongest inflow since April 2022. Western investors in particular showed themselves in the gold market, something we no longer saw on this scale since 2020.
Bitcoin not an inflation hedge?
Bitcoin is often presented as the ultimate digital gold, a modern, technological counterpart of the precious metal. Yet that promise is not for the time being. In times of economic uncertainty, the digital currency appears to be vulnerable and it performs weaker than traditional safe ports. With that, BTC remains a speculative investment agent for the time being.
The decrease is all the more striking, because there was still big news in March: the United States officially announced a national strategic reserve in which Bitcoin was also included. A huge bullish signal that takes the adoption from crypto to a whole new level. Yet we don’t see it in the BTC course.
Zoom out
Do we expect too much from Bitcoin at the moment? Maybe. We must not forget that the digital currency has already taken an impressive road. In September 2024 the race was still around $ 55,000. And whoever looks back, over the past ten years, sees almost alien growth.
It is not surprising that BTC is still quite volatile today. It is part of young, fast -growing assets: the greater the rise, the more intense the fluctuations. Volatility does not mean the foundation is weak, but it takes time for a new asset class to find its place in the wider financial world.
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Source: https://newsbit.nl/goud-blinkt-maar-bitcoin-blijft-worstelen/
