How Can Bitcoin Rise While the Gold Price Falls? What Do Analysts Expect Next? Here are the Answers

Bitcoin has outperformed gold by a large margin in the past month, rising more than 46% while gold prices have fallen more than 3%.

This sharp divergence signals a growing shift in institutional investor sentiment, with analysts suggesting that Bitcoin is increasingly viewed as a high-growth investment and a modern alternative to traditional inflation hedges like gold.

Gold is trading above $2,600 an ounce, down from a record high of $2,787 in late October, while bitcoin has risen from $68,000 to over $98,000 in the same time frame.

Deenar co-founder Maruf Yusupov attributes Bitcoin’s rapid rise to the market’s reaction to Donald Trump’s re-election victory in the United States.

“Trump’s tax cuts, tariffs, and focus on cryptocurrencies are driving interest in Bitcoin as a modern alternative to gold,” Yusupov said. “As institutional adoption accelerates, we could see a significant shift in capital away from gold and toward digital assets.”

Growing institutional interest in Bitcoin is reshaping its presentation as a hedge against inflation and a tool for portfolio diversification. deVere Group CEO Nigel Green noted the expanding infrastructure to support mass adoption.

“Bitcoin is increasingly viewed as a hedge and diversifier against inflation as institutional interest reaches all-time highs,” Green said.

This perspective was echoed by Fadi Aboualfa, Head of Research at Copper.co, who highlighted the similarities in price movement between spot Bitcoin and gold ETFs:

“Trends show that both Bitcoin and gold ETFs are following similar price patterns and that assets under management are increasing. This not only points to common market drivers, but also suggests that Bitcoin may be solidifying its position as a new store of value alongside gold.”

Gold’s waning appeal has been further fueled by the Federal Reserve’s recent hawkish stance, with Fed Chairman Jerome Powell signaling a cautious approach to rate cuts, keeping U.S. Treasury yields high and dampening demand for traditional inflation hedges like gold.

“Powell’s comments suggest that U.S. Treasury bonds could retain their high yields, reducing the need for inflation hedges like gold,” Yusupov said. “This shift could also prompt investors seeking diversification to consider Bitcoin.”

*This is not investment advice.