Given the Trump administration\u2019s vocal and demonstrated support for crypto, some investors are likely wondering whether gold\u2019s days as the world\u2019s favorite hedge asset are numbered.<\/p>\n
Andr\u00e9 Dragosch, European head of research at Bitwise Asset Management, suggests the choice isn\u2019t so simple. In a post on X<\/a> Saturday, 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.<\/p>\n Gold: Hedge of choice<\/p>\n The reasoning starts with history. When equities sell off, investors often rush into gold<\/a>. Decades of market data back this up. Gold\u2019s long-run correlation with the S&P 500 has hovered near zero, and during market stress, it often dips into negative territory. <\/p>\n For example, in the 2022 bear market, gold prices rose about 5% even as the S&P 500 tumbled nearly 20%. That pattern illustrates why gold is still considered the classic \u201csafe haven.\u201d<\/p>\n Bitcoin: A bond market counterweight<\/p>\n Bitcoin, by contrast, has often struggled during equity panics. In 2022, it collapsed by more than 60% alongside tech stocks. But its relationship with U.S. Treasuries has been more intriguing. <\/p>\n Several studies note<\/a> that bitcoin has shown a low or even slightly negative correlation with government bonds. That means when bond prices sink and yields rise \u2014 as they did in 2023 during fears over U.S. debt and deficits \u2014 bitcoin has sometimes held up better than gold.<\/p>\n Dragosch\u2019s takeaway: investors don\u2019t 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.<\/p>\n Does it work in 2025?<\/p>\n The split has been clear this year. <\/p>\n As of Aug. 31, gold was up more than 30% year-to-date, according to World Gold Council data<\/a>. That surge reflects renewed demand during bouts of equity volatility tied to tariffs, slowing growth, and political risk. <\/p>\n Bitcoin, meanwhile, has gained about 16.46% this year, based on CoinDesk Data<\/a>, a solid performance considering that 10-year U.S. Treasury yields have fallen around 7.33%, according to MarketWatch data<\/a>.<\/p>\n The S&P 500, by comparison, is up roughly 10% in 2025, per CNBC data<\/a>. <\/p>\n The diverging performance underscores Dragosch\u2019s 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.<\/p>\n