Bitcoin Stagnates Whilst Gold Soars: Industry Voices Explain the Divergence

Bitcoin's performance continues to disappoint those who claim the asset functions as protection against inflation or a refuge during periods of uncertainty. Whilst gold has surged more than 80% during the current environment of elevated inflation, geopolitical tensions, and central bank policy shifts, Bitcoin has fallen 14% on an annual basis.

The contrast has become increasingly stark. Assets designed to preserve value when fiat currencies weaken should, in theory, appreciate during inflationary periods. This dynamic has held true for gold and other precious metals. For Bitcoin, often described as digital gold, the reality has been markedly different.

The divergence raises an uncomfortable question for cryptocurrency proponents: why would investors allocate capital to Bitcoin when traditional assets such as equities and precious metals deliver superior returns?

Tezons has gathered perspectives from several longstanding Bitcoin advocates to understand how they reconcile this underperformance with their continued support for the asset.

Institutional Familiarity Over Innovation

Jessy Gilger, senior adviser at Gannett Wealth Advisors, a wealth management firm focused on Bitcoin, argues that gold's recent strength represents a temporary response driven by political uncertainty rather than a fundamental shift.

"In times of fear, institutions tend to retreat to what they know because they often lack the foresight to embrace a genuine phase shift in technology," Gilger stated. She pointed to what she described as an unusual deviation in the relationship between gold and Bitcoin, but emphasised that hard assets should be evaluated over longer timeframes.

Gilger contends that whilst gold benefits from historical precedent, Bitcoin has demonstrated technical reliability at a protocol level for more than fifteen years. She expects the market to eventually recognise digital scarcity as more efficient than physical legacy assets.

Supply Transfer, Not Demand Failure

Mark Connors, chief investment officer at Risk Dimensions, rejects the notion that Bitcoin is failing to meet expectations in the current macroeconomic environment. Instead, he attributes the price stagnation to internal market dynamics that he believes most observers overlook.

"It is not a demand problem; it is a supply distribution event," Connors explained. He notes that institutional exchange-traded fund inflows remain substantial but are not translating into price appreciation. Rather, these inflows are absorbing Bitcoin being sold by early holders who accumulated the asset years ago.

Connors characterises the current situation as a transfer of ownership from one class of investor to another, rather than evidence of waning interest in the asset.

Digital Assets Follow Technology Stocks

Charlie Morris, chief investment officer at ByteTree, observes that both gold advocates and Bitcoin supporters employ similar arguments: finite supply, monetary expansion, inflation, conflict, and instability. However, he draws a distinction between the two assets based on their respective domains.

Morris views gold as the reserve asset for the physical world, whilst Bitcoin serves a similar function for the digital realm. He argues that current economic challenges are rooted in the physical world, which explains gold's outperformance.

"Bitcoin is not failing, it is merely retreating in line with internet stocks, which it has always been closely correlated with since it came to be," Morris stated.

Earned Trust Takes Time

Peter Lane, chief executive of Jacobi Asset Management, acknowledges that the digital gold narrative has not held up under recent testing. Bitcoin has failed to behave as a genuine inflation hedge or safe haven during geopolitical stress and monetary uncertainty. Gold and silver have been the clear winners in 2025.

Lane points to a longstanding, widespread comfort with precious metals that Bitcoin has not yet established. He remains open to the possibility of a delayed rotation into Bitcoin, but notes that investors are currently favouring assets they understand and trust.

Evolving Demand Drivers

Anthony Pompliano, chairman and chief executive of ProCap Financial, contends that Bitcoin has largely functioned as an inflation hedge over the past five years. However, with deflationary pressures potentially emerging, he argues the asset will need to attract demand from other sources to sustain price appreciation.

Pompliano maintains optimism about Bitcoin's prospects but acknowledges that both the macroeconomic environment and the Bitcoin market participant base are changing rapidly.

Long-Term Solution Versus Short-Term Hedge

David Parkinson, chief executive of Musquet, a Bitcoin Lightning company, dismisses criticisms of digital gold as premature. He points to Bitcoin's fixed supply and network growth as factors that have delivered stronger returns than inflation and gold over multi-year periods.

Parkinson frames Bitcoin not as a hedge against inflation but as a structural solution to it, positioning the asset as the internet's native monetary system. He suggests that gold and traditional inflation hedges are experiencing a temporary moment, whilst Bitcoin will ultimately prove superior.

Capital Rotation Ahead

Andre Dragosch from Bitwise attributes the precious metals rally to what he describes as muscle memory. During uncertain times, investors gravitate towards familiar assets first, which currently means gold and silver.

Dragosch acknowledges that Bitcoin remains perceived as a riskier asset despite what he views as superior store-of-value characteristics compared to gold. He expects Bitcoin to attract demand once traditional hard assets reach what he considers excessive valuations and capital begins rotating towards more attractively priced alternatives.

Dragosch notes that Bitcoin is already at valuation levels relative to gold last seen during the FTX collapse in 2022, based on a relative pricing metric. He also points to what he describes as significant underpricing of Bitcoin relative to both the 2026 macroeconomic environment and global money supply levels, which he expects to resolve upwards in coming months.‍

Industry Impact and Market Implications

The divergence between Bitcoin and gold performance highlights ongoing questions about cryptocurrency's role in portfolio allocation during periods of economic stress. Institutional adoption through exchange-traded funds has accelerated, yet this has not translated into price strength, suggesting that market structure and holder composition may be evolving.

The responses from industry participants reveal differing views on whether Bitcoin's underperformance represents a temporary market dynamic or a more fundamental challenge to its value proposition as a safe-haven asset. The supply transfer thesis, if accurate, implies that institutional accumulation is occurring but remains hidden by selling from earlier holders.

The comparison to technology stocks rather than precious metals may have implications for how financial advisers and asset allocators view Bitcoin within diversified portfolios. If Bitcoin continues to move in tandem with risk assets rather than gold, its utility as a hedge during market downturns may remain limited.

The lack of sustained demand during an inflationary period could influence regulatory discussions around cryptocurrency marketing and investor protection, particularly regarding claims about Bitcoin's monetary properties. Asset managers may face pressure to clarify how they categorise and present Bitcoin to clients.

The potential for capital rotation from precious metals to Bitcoin remains speculative. The timeframe for such a shift, if it occurs, is uncertain and depends on variables including interest rate policy, geopolitical developments, and broader investor sentiment towards digital assets versus traditional stores of value.