Is it Time to Fully Ditch Gold in Favor of Bitcoin?

Bitwises Andr Dragosch argues gold still protects against stock sell-offs while bitcoin hedges bond stress raising questions about their roles in 2025 portfolios.

What to know:

• Bitwises Andr Dragosch says gold works best as a hedge when equities tumble, while bitcoin offers more resilience when U.S. bond markets are under pressure.
• Historical data and industry research back the split: gold often rises in equity bear markets, while bitcoin has held up better during Treasury sell-offs.
• So far in 2025, gold is up more than 30% and bitcoin about 15%, reflecting their diverging roles as investors weigh higher yields, equity volatility, and Trumps pro-crypto stance.

• Given the Trump administrations vocal and demonstrated support for crypto, some investors are wondering whether golds days as the worlds favorite hedge asset are numbered.

  Andr Dragosch, European head of research at Bitwise Asset Management, suggests the choice isnt so simple. In apost on XSaturday, he offered a rule-of-thumb: gold still works best as protection against stock market losses, while bitcoin increasingly acts as a counterweight to bond market stress.
  
  Gold: Equity Hedge of Choice

  The reasoning starts with history. When equities sell off, investors oftenrush into gold. Decades of market data back this up. Golds long-run correlation with the SP 500 has hovered near zero, and during market stress it often dips negative.

• For example, in the 2022 bear market, gold prices rose about 5% even as the SP 500 tumbled nearly 20%. That pattern illustrates why gold is still considered the classic safe haven.

  Bitcoin: A Bond-Market Counterweight

  Bitcoin, by contrast, has often struggled during equity panics. In 2022, it collapsed more than 60% alongside tech stocks. But its relationship with U.S. Treasuries has been more intriguing.

  Several studiesnotethat bitcoin has shown a low or even slightly negative correlation with government bonds. That means when bond prices sink and yields rise as they did in 2023 during fears over U.S. debt and deficits bitcoin has sometimes held up better than gold.

  Dragoschs takeaway: investors dont need to pick one over the other. They play different roles. Gold is still the better hedge when stocks wobble, while bitcoin may help portfolios when bond markets are under pressure from rising rates or fiscal worries.

  How the Rule Holds in 2025

  The split has been clear this year. As of Aug. 31, gold was up more than 30% year-to-date, according toWorld Gold Council data. That surge reflects renewed demand during bouts of equity volatility tied to tariffs, slowing growth, and political risk.

  Bitcoin, meanwhile, has gained about 16.46% this year, based onCoinDesk Data, a solid performance considering that 10-year U.S. Treasury yields have fallen around 7.33%,according to MarketWatch data.

  The SP 500, by comparison, is up roughly 10% in 2025, perCNBC data.

  The diverging performance underscores Dragoschs heuristic: gold has benefited most from equity jitters, while bitcoin has held its ground as bond markets wobble under the weight of higher yields and heavy government borrowing.

  Not Just Opinion: Data Backs It

  This isnt just Dragoschs personal view. A Bitwiseresearch reportearlier this year noted that gold remains a reliable hedge against stock market downturns, while bitcoin has tended to provide stronger returns during recoveries and shows lower correlation with U.S. Treasuries. The report concluded that holding both assets can improve diversification and optimize risk-adjusted returns.

  The Caveats

  Still, correlations arent static. Bitcoins ties to equities have strengthened in 2025 thanks to large inflows into spot ETFs, which have brought in billions from institutional investors.

• The huge net inflows into spot Bitcoin ETFs makes BTC trade more like a mainstream risk asset, reducing its purity as a bond hedge.

  Short-term shocks can also scramble the picture. Regulatory surprises, liquidity squeezes, or macro shocks may move both gold and bitcoin in the same direction, limiting their usefulness as hedges. Dragoschs rule-of-thumb, in other words, is just that a heuristic, not a guarantee.

  The Bottom Line

  Trumps pro-crypto stance raises a provocative question: is it time to abandon gold entirely in favor of bitcoin? Dragoschs answer, supported by years of data, is no. Gold still works best when stocks tumble, while bitcoin may offer shelter when bonds are under pressure. For investors, the lesson isnt ditching one asset for the other, but recognizing that they hedge different risks and using both may be the smarter play.