Gold is beating bitcoin since Trump took office. Here’s why.
Subscribe to enjoy similar stories. Bitcoin and gold actually have a lot in common. They both straddle the line between assets and currencies.
Their finite supply—not controlled by any government—appeals to investors seeking protection against potential inflation. And neither throws off any cash, so investors who want to earn a profit need prices to rise. Their fortunes, however, have diverged lately.
Bitcoin’s price has declined 24% since hitting a record high of more than $109,000 on Jan. 20—the day crypto-friendly President Donald Trump took office. Gold, on the other hand, has kept rallying, gaining nearly 8% in the same span.
(Both still have seen handsome gains over the past year.) The contrast highlights the different factors driving the two assets’ prices. More importantly, it also suggests that investors looking for a store of value—or even an alternative investment uncorrelated to the stock market—would probably do better with gold over Bitcoin. “Gold is a safe haven," says Eric Wallerstein, chief markets strategist at Yardeni Research.
Yardeni sees gold prices hitting $4,000 by the end of the decade, but doesn’t maintain a Bitcoin target. “While there are probably some people who tell themselves they’re buying Bitcoin as a long-term hedge against U.S. inflation or the financial system, what it really comes down to is that it’s a super speculative asset." Bitcoin’s annual price volatility has been about 50% in recent years, according to BlackRock, compared with about 15% for gold.
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