Gold Hits All Time High While Bitcoin Drops Showing Asset Divergence
Gold reached an all-time high of $3,485 per ounce on Monday following President Donald Trump's inflation remarks on social media. Bitcoin moved in the opposite direction, falling to an eight-week low. This divergent movement demonstrates what analysts call Bitcoin's "split personality," according to Cointelegraph.
IG market analyst Tony Sycamore told the publication that Bitcoin sometimes acts as a store of value like gold, while other times it behaves as a risk asset. Over the past two and a half years, gold, Bitcoin, and the Nasdaq showed strong correlation, with all three assets rising together. However, recent weeks have seen this correlation break down.
The price movements occurred as gold climbed 1% to reach its record level. Bitcoin, meanwhile, traded at multi-week lows despite historical patterns showing it typically follows gold's directional moves with a 100-150 day delay.
Why This Market Split Matters Now
The breakdown between Bitcoin and gold reflects broader changes in investor behavior during 2025. OpenMarkets analysis shows the assets moved together from November 2022 to November 2024, with gold gaining 67% while Bitcoin surged 400%. As of late March 2025, gold has risen 16% while Bitcoin dropped more than 6%.
Bitcoin maintains a strong 0.76 correlation with the Nasdaq Composite index. Many institutional trading desks group volatile assets like Bitcoin and Nasdaq stocks together, assuming traders skilled in handling volatility can manage both. Sharp Nasdaq declines often trigger Bitcoin sales to cover margin requirements.
Gold's recent strength comes from economic uncertainty, rising inflation expectations, and central bank policy shifts. Central banks in China, India, and Russia have accelerated gold purchases at unprecedented rates. Global central banks purchased 710 tonnes of gold in 2025, while gold ETFs attracted $21.1 billion in inflows.
We previously covered how Panama City explored Bitcoin reserves following talks with El Salvador advisors, showing institutional interest remains strong despite recent price weakness. Government-level Bitcoin adoption continues expanding globally.
Industry Implications For Digital And Physical Assets
This divergence affects how institutional investors view both assets in their portfolios. Bitcoin funds reached $162 billion in assets under management in 2025, while gold ETFs maintain $104.45 billion. Combined, these assets now exceed $500 billion in total holdings.
Bitcoin's correlation with traditional risk assets like equities challenges its "digital gold" narrative. While Bitcoin proponents promote it as an inflation hedge, its price movements continue mirroring tech stocks rather than safe haven assets. During the COVID-19 pandemic, gold reached $2,070 per ounce providing stability when markets collapsed. Bitcoin plunged nearly 50% in March 2020 before recovering.
The Federal Reserve's potential shift toward monetary easing could benefit both assets differently. Gold typically benefits from lower interest rates and currency debasement concerns. Bitcoin's response to Fed policy remains less predictable, though its fixed 21 million coin supply offers theoretical protection against inflation.
Deriv analysis suggests Bitcoin isn't yet the hedge many hoped it would be in 2025. "Bitcoin is moving with equities, an example of its role as a macro-sensitive asset rather than a pure hedge," notes Mena Theodorou, Co-founder at crypto exchange Coinstash.
Looking ahead, the relationship between Bitcoin and gold may evolve into complementary rather than competing roles. Bitcoin's digital nature appeals to borderless value transfers, while gold's established central bank reserve status suggests it remains the primary safe haven asset. A diversified portfolio might include gold at 5-10% for stability and Bitcoin at 1-5% for high-growth potential with institutional legitimacy.
Both assets face different regulatory and adoption challenges. Bitcoin continues building institutional acceptance through ETF approvals and corporate treasury adoption. Gold maintains its traditional role but faces competition from digital alternatives among younger investors seeking portfolio diversification.
