Bitcoin has long been pitched as digital gold, a scarce, government-free asset that should shine when fiat currencies falter or in times of turmoil.
Recent price action, however, tells a different story. Bitcoin has roughly halved since peaking above $124,000 in October, last week plunging to its lowest level since 2024, after falling below $65,000.
Devotees will counter that nerve-rattling drawdowns are nothing new for the cryptocurrency, but the contrast with gold is hard to ignore: even after the recent sharp correction, gold is up some 70 per cent over the past year.
Economist Noah Smith suggests investors generally treat bitcoin as something that thrives when the US economy does well, not as a refuge in global turmoil. By contrast, there is widespread agreement that gold protects wealth in uncertain times.
Hence, gold has drawn buyers amid fears over the Trump administration’s attempts to influence the Federal Reserve, mounting doubts about how much of the rules-based international order is still standing, and broader geopolitical turmoil among great powers.
Goldbugs can be a shouty, apocalyptic bunch, but they do have roughly 5,000 years of history – and repeated crises – on their side.
In contrast, 17-year-old bitcoin is still waiting for events to explain its supposed purpose. Until that changes, digital gold is likely to remain more of a metaphor than a market reality.