Gold has been the best-performing asset in recent months, with the precious metal rallying to a new all-time high in the weeks following US President Donald Trump’s “Liberation Day” tariff announcement on April 2.
Its price peaked above $3,500 per ounce on April 21, meanwhile, Bitcoin (BTC) was changing hands at $87,000. The apex cryptocurrency improved from its record yearly low of $75,000 ahead of Liberation Day, but continues to trade about 20% below its ATH of $109,000 from January 2025.
However, in the following weeks, gold has tumbled nearly 10% to trade just above $3,200 per ounce. During the same time, BTC has rallied about 10% to a two-month high of $97,000. Gold’s blow-off top last week appears to have benefited the apex cryptocurrency, and experts are suggesting that trend could be set to continue.
Bitcoin ETF Inflows Mirror Levels Before Trump’s Election, Indicating a BTC Rally May Be Under Way
Standard Chartered analyst Geoff Kendrick suggested that Bitcoin could be a better hedge than gold against strategic asset reallocation out of the US dollar and traditional financial instruments. He also noted that the ETF inflow situation “has flipped” along with the price, with the money going into Bitcoin ETFs triumphing over capital headed into gold ETFs.
Kendrick highlighted that the last time Bitcoin ETF inflows had such a margin over its gold counterpart was during the week of the US presidential election in November 2024. This was significant because two months after Trump’s election victory, the price of Bitcoin had risen more than 40% to above $100,000.
Analysts have noted that when gold’s price peaks and begins to decline, investors often reallocate capital into alternative assets, mainly Bitcoin, because they both are viewed as hedges against macroeconomic uncertainty. The inversely correlated trend of outflows from gold ETFs coinciding with inflows into Bitcoin ETFs suggests that institutional and retail investors are shifting their preference from gold to Bitcoin as a store of value.
Bitcoin’s effectiveness as a better hedge than gold is reinforced by the flagship crypto asset’s strong performance during periods when gold falters, as well as growing institutional interest. The current macroeconomic backdrop, marked by recession fears, a weakening dollar, and expectations of the Federal Reserve announcing rate cuts, has historically benefited both gold and Bitcoin. However, Bitcoin’s digital and decentralized nature, fixed supply, and greater media attention are making it more attractive to new generation investors.
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Gold Price Correction Prompts Capital Reallocation Into Bitcoin
The correction in the price of gold has created a psychological and technical resistance level for Bitcoin around the $97,000 level, creating bullish sentiment among investors as they increasingly anticipate a breakout. Analysts also noted that a rise in gold price often leads to rallies in safe-haven assets, with BTC following the precious metal’s lead after a short lag. These historical patterns suggest that Bitcoin could see further gains as capital rotates out of gold into digital assets.
To summarize, gold’s price correction is directly beneficial to Bitcoin as it prompts capital rotation from traditional safe-haven assets into digital alternatives. This shift is supported by changing investor perceptions, increased institutional participation, and the broader macroeconomic environment, which favors Bitcoin, because it has a capped supply, is independent of centralized control, and can be accessed digitally from all over the world, as a more credible and guaranteed hedge against inflation and currency debasement.