As gold’s record-setting rally falters, Bitcoin appears to be gaining strength
Bitcoin is trading today above $93,000, holding steady even as gold prices slip more than 5% from last week’s intraday peak. The reversal in gold’s momentum, driven by signs of easing trade tensions, could open new doors for Bitcoin as investors reassess their safe-haven bets.
Gold, which outperformed other asset classes through late February and early April, had surged in part because of President Donald Trump’s aggressive tariffs. The tariffs rattled global markets and weakened confidence in traditional financial structures. However, as geopolitical fears begin to ease, bullion’s shine is dimming. Bitcoin is standing out as a potential alternative.
Caution Flags Rise in Gold Market
Traders initially rushed to gold, pushing options activity on the SPDR Gold Shares ETF past 1.3 million contracts in a single session — a record. Yet underneath the frenzy, cracks have appeared. The cost of hedging against declines in gold is near its lowest since August. This is the case even as implied volatility has spiked — an unusual and concerning signal.
Barclays strategists have warned that gold is “running ahead of its fundamentals,” pointing to a disconnect between the metal’s price and its traditional drivers like the U.S. dollar and real interest rates. They now recommend a zero-cost risk reversal — selling June calls to buy puts — anticipating that gold will continue to decline.
“We think that gold is going to come down,” said Barclays’s Stefano Pascale, highlighting that technical indicators are becoming overstretched.
Bitcoin Positioned for Strength Amid Gold’s Weakness
While gold’s future looks increasingly fragile, Bitcoin may be poised for further gains. Garrett DeSimone, head quantitative analyst at OptionMetrics, notes that Bitcoin and gold have exhibited similar “spot-up, vol-up” dynamics over the past year. However, with gold now losing its luster, Bitcoin’s role as a volatility-resilient asset could become even more attractive.
Importantly, Bitcoin’s options market shows a balanced skew between upside and downside bets. This suggests that sentiment around the cryptocurrency remains stable and has room to grow if risk appetite shifts further away from traditional assets like gold.
“Both assets could still rally further,” DeSimone said. However, the underlying resilience in Bitcoin’s structure, compared to gold’s speculative surge, paints a bullish outlook for crypto.
Broader Market Implications
The latest shifts come amid a broader reassessment of global financial dynamics. The end of “U.S. exceptionalism” — a key driver of safe-haven demand for both gold and Bitcoin — is being hotly debated among strategists. Central banks continue to buy gold at a healthy pace. However, Barclays noted that the pace is not historically unusual and does not fully justify the recent spike in prices.
As gold’s rally stumbles and hedge funds unwind their bullish bets, Bitcoin’s steady climb past the $93,500 mark could mark the beginning of a broader divergence — one where digital assets increasingly steal the safe-haven spotlight.
For now, investors are watching closely: if gold continues to slide, Bitcoin may be the primary beneficiary.