Gold displaces Bitcoin: when security wins over speculation

Global markets are experiencing a fundamental reassessment of risk. While investors are trying to hedge against political instability and debt crises, gold has begun one of the strongest cumulative gains in decades, and Bitcoin remains in consolidation below $90,000. This standoff — between the traditional safe-haven asset and digital gold — reveals a deep truth about how markets are reallocating capital in times of uncertainty. At the same time, a paradox emerges: some voices insist that quantum computing influences market behavior, but on-chain data tell a different story.

Gold triumphs in global capital flows, Bitcoin becomes marginalized

Since Donald Trump’s victory in the November 2024 elections, the divergence in asset returns has remained striking:

Gold: +83% (reaching $4,930 per ounce)
Silver: +205% (rising to $96)
Nasdaq: +24%
S&P 500: +17.6%
Bitcoin: -2.6% (while other assets soared)

These figures tell a detailed story. While even the softest traditional equities show double-digit gains, and gold experiences its largest cross-asset return, Bitcoin lags behind, remaining roughly 30% below last year’s highs. The reason is simple: global sovereigns and institutional portfolios predominantly choose yellow metal as a hedge against credit risks, geopolitical uncertainty, and record-high government debt levels.

This week, gold renewed discussions about the scale of its further growth. Charles Edwards of Capriole Investments forecasted a potential rise to $12,000–$23,000 per ounce over the next 3–8 years. This extrapolation is based on three main factors:

• Central bank accumulation at historic levels: China has increased its gold reserves nearly tenfold over the past two years
• Money supply expanding over 10% annually globally
• Loss of confidence in bond markets: Traditional safe assets no longer seem safe

“If this cycle reflects the large monetary expansions of the 20th century, gold is still far from exhausting its potential,” Edwards wrote. Although the relative strength index (RSI) for gold has reached its highest levels since the 1970s, analysts emphasize that this is not speculation — it’s a systemic reallocation of global reserves from bonds to physical metal.

From gold accumulation to quantum fear: is the analysis fair?

When Bitcoin remained in a consolidation range, some voices in the crypto sphere stopped seeking traditional explanations. Nick Carter of Castle Island Ventures revived a long-standing debate this week: do fears of quantum computing influence price dynamics?

“Low Bitcoin performance is caused by the quantum threat,” Carter claimed. “The market says — developers aren’t listening.” His statement immediately drew criticism from on-chain analysts and long-term investors, who saw the fundamental issue as superficial.

The real reasons for Bitcoin’s weakness: not quantum threat, but supply unlocking

Checkonchain analyst and researcher @Checkmatey offered an alternative perspective based on on-chain data rather than speculation. He argued that Bitcoin’s behavior more closely reflects historical cycles driven by supply rather than existential technological risks.

“Gold has demand because sovereigns buy it instead of bonds,” he explained. “Bitcoin, however, has experienced multiple significant supply expansions from early holders in 2025 — enough to flood the previous bull rally.”

Vijay Boyapati, a long-time Bitcoin investor and author of The Age of Cryptocurrency, highlighted an even more specific trigger: the psychological readiness of the market around $100,000. “The real explanation lies in the unlocking of a huge accumulated supply as we approach round numbers for whales,” he said.

On-chain data confirms this. Long-term Bitcoin holders (those holding for years) systematically release coins as they approach psychological barriers. This selling absorbed new demand from Bitcoin ETFs and institutional portfolios but was insufficient to generate internal momentum. The result: consolidation instead of a breakout.

Gold as an alternative: why sovereigns prefer yellow metal over crypto

Central banks worldwide — from Fed-controlled reserves to BRICS alternative reserve schemes — choose gold as the ultimate safety asset. It’s not a choice of desperation but a strategic reassessment of what “safe asset” means in a world where government bonds have negative real yields and currency risks are constant.

Bitcoin has gained institutional approval via ETFs in the US but remains too volatile for massive sovereign fund allocations. Gold, on the other hand, offers what Bitcoin cannot yet: a three-millennia history as a store of value, a negative correlation with bonds, and an existing physical infrastructure for storage.

In this context, Bitcoin’s portfolio rating from -2.6% against gold’s +83% since November 2024 no longer seems surprising. It’s a systemic rebalancing.

Quantum threat: a theoretical danger or marketing noise?

Despite renewed attention from analysts to quantum computers, most Bitcoin developers interpret this as long-term risk management rather than an imminent factor.

Quantum machines capable of Shor’s algorithm (theoretically able to factor large numbers and break elliptic cryptography) remain far from practical implementation that could threaten Bitcoin at scale. Adam Back, co-founder of Blockstream, repeatedly noted that even in the most optimistic scenarios, this would not cause immediate network failures.

Moreover, Bitcoin Improvement Proposal BIP-360 already outlines a gradual migration path to quantum-resistant address formats. Such updates, developers emphasize, will unfold over years and decades, not market cycles. They make quantum risk an unlikely explanation for short- or even medium-term price weakness.

Macroeconomic reality: Bitcoin is no longer a safe asset

Currently, Bitcoin’s disappointment reflects not technological instability but macroeconomic reassessment. Market participants perceive the current environment as built on:

• Rising global bond yields (various national central banks signal further rate hikes)
• Trade tensions and geopolitical instability
• Sovereign shift from bonds to physical gold
• Capital accumulation in custodial funds rather than speculative growth

In such conditions, Bitcoin acts as a high-beta risk asset — exactly what investors avoiding turbulence seek to escape. Gold, conversely, shows negative correlation with stocks and bonds simultaneously, making it an unnecessary multi-asset hedge.

Bitcoin will regain upward momentum only if it stays within the $91,000–$93,500 zone. If it fails, the first major support lies in the $85,000–$88,000 range. However, until macroeconomic clarity returns — whether through borrowing or geopolitical peace — Bitcoin is likely to remain reactive rather than proactive.

In this context, gold continues to benefit from the largest global redistribution of capital flows in generations. Between the traditional safety of gold and the unpredictability of Bitcoin, the choice for conservative portfolios has become clear.

Source: Cointelegraph