Gold outperforms Bitcoin BTC$90,776.77 This year will not only affect price trends, but also investor confidence. Since the launch of the Spot Bitcoin ETF in early 2025, many were expecting a strong and sustained rise in the digital asset. But nearly two years later, gold has quietly outperformed, raising questions about whether Bitcoin is really ready to rival traditional safe-haven assets.
Since the ETF's inception in January 2024, Bitcoin is down about 12%, while gold is up 58% over the same period. For Mark Connors, founder and chief macro strategist at Bitcoin investment advisory firm Risk Dimensions and former global head of risk advisory at Credit Suisse, the answer is simple: “Not yet.”
“Bitcoin is still too young,” Connors told CoinDesk in a recent interview. “The key buyers – central banks, sovereign wealth funds and large asset allocators – still prefer gold.”
Volatility and regulatory uncertainty are not the only reasons, though they are also at play. The deeper issue, Connors said, is infrastructure and historical precedent. Gold has centuries of trust and established financial channels behind it. Central banks already have gold accounts. Gold is used for trade. Bitcoin, in contrast, remains outside that system.
“Some of these institutions didn't exactly call Unchained and say, 'Can I get my wallet?'” Connors said. “They just aren't there yet.”
This difference is becoming more pronounced as BRICS countries, including China, India and Russia, accelerate their gold accumulation. In some cases, they have even started using gold to settle oil trades. That is an important role that Bitcoin has not yet stepped into. Despite Bitcoin being designed as a decentralized and borderless currency, it is not used for large-scale international payments.
“Gold has a trade component that creates real demand,” Connors said. “Bitcoin doesn’t have that yet.”
Bitcoin price decline has more to do with liquidity than sentiment
The performance gap between Bitcoin and gold has widened in recent months. Bitcoin has fallen more than 30% from its July high. In contrast, gold recorded a steady rise, reaching over $4,100 per ounce.
Connors doesn't think this is just due to emotional changes. Rather, it points to a broader liquidity squeeze caused by U.S. fiscal policy.
“If the Treasury doesn't spend, there will be less money in the system,” he said. “And Bitcoin is very sensitive to liquidity, especially in Asia, because of its leverage structure.”
During the U.S. government shutdown earlier this year, the Treasury's balance sheet ballooned from about $600 billion to nearly $1 trillion. The spending freeze has dried up liquidity in both traditional and crypto markets. But Bitcoin felt the pain more acutely.
“We're all at the same water table,” Connors said. “If the U.S. stops spending, it will affect global capital flows.”
The government shutdown may be over, but the Treasury Department has yet to fully resume large-scale spending. Connors argues that the lag has created a kind of stalemate for markets, especially risky assets like Bitcoin.
A long road ahead
Performance degradation may not be permanent. Connors sees signs that liquidity could return to the market, especially if the U.S. government starts issuing more Treasury bills to finance deficit spending. He also believes that Bitcoin's appeal as a neutral asset will increase as confidence in fiat currencies weakens, especially in emerging markets.
Still, he cautioned against thinking that Bitcoin will replace gold anytime soon. He said that while the comparison may serve as a reference point, it does not reflect how large institutions actually allocate capital.
“They're not flipping coins between gold and bitcoin,” Connors said. “They are choosing what fits their mission, and gold fits, but Bitcoin doesn't fit yet.”
If anything, the recent divergence indicates that cryptocurrencies' path to becoming a global reserve asset may be slower than many expected. Not because technology doesn't work, but because it takes time to build trust and habits.
“Gold has been around forever,” Connors said. “Bitcoin is still growing.”
