As Gold Nears $3,000: A Historic Rally, But Can It Outshine Bitcoin and Stocks?

KEY POINTS

• Gold's surge past $3,000 is driven by central bank purchases, economic uncertainty, and market turbulence, making it a preferred safe-haven asset despite its slower long-term growth compared to bitcoin and stocks.

• Bitcoin is increasingly challenging gold’s status as a hedge against inflation and financial crises, with institutional adoption and potential government-backed reserves fueling its rise, though it remains highly volatile.

• While gold and bitcoin are often seen as competing safe-haven assets, many investors now view them as complementary, with gold offering stability and bitcoin presenting high-growth potential amid global economic uncertainty.

👉 Bonus: Below you will find five ChatGPT prompts that you can use to develop your expertise in this area.

Gold’s rapid ascent toward $3,000 an ounce has reignited debates over its role as a safe-haven asset. Year to date, gold has outperformed both the S&P 500 and bitcoin, driven by central bank purchases, economic uncertainty, and market turbulence. Yet, compared with the explosive gains of bitcoin and equities over the past five years, gold’s rise has been far more measured.

Bitcoin’s rise alongside gold has sparked a fierce debate over the future of safe-haven assets. Traditionally, gold has been the go-to hedge against inflation, economic uncertainty, and geopolitical turmoil. But as the digital age accelerates, bitcoin is emerging as a competitor, often dubbed “digital gold.” Both assets thrive in times of financial stress, but their underlying mechanics and long-term trajectories differ sharply.

With investors facing an increasingly volatile financial landscape, the key question remains: is gold’s resurgence a lasting shift in market sentiment, or just another cyclical high before a retracement?

Gold’s Resurgence: Outpacing Stocks and Bitcoin in 2025

As of February 12, gold futures had climbed over 11% this year, compared with a modest 3% gain in the S&P 500. Meanwhile, bitcoin has been highly volatile, surging past $100,000 before retracing on profit-taking and regulatory concerns.

Gold mining stocks, often seen as a leveraged play on the metal itself, have also staged a strong rally, with the VanEck Gold Miners ETF soaring nearly 24% in 2025. This suggests a broader shift in sentiment toward gold-related assets, fueled by global uncertainty.

Yet, despite this near-term outperformance, gold has significantly lagged behind bitcoin and stocks over the longer term. Since mid-2020, when gold first breached $2,000, its price has climbed about 48%. Over the same period, bitcoin has skyrocketed by 761%, while the S&P 500 has gained nearly 99%.

This contrast highlights gold’s nature as a hedge rather than a high-growth asset. Unlike bitcoin, which has captured speculative capital and institutional inflows, or equities that benefit from economic expansion, gold’s appeal lies in its stability and crisis-driven demand.

Why Gold is Rising Now

Several macroeconomic factors are pushing gold to new highs:

1. Central Bank Buying
   Global central banks, particularly in emerging markets, have been aggressively accumulating gold, extending a 15-year buying streak. The World Gold Council reports that over 1,044 metric tons were purchased in 2024 alone. This accumulation reflects concerns over geopolitical risks, dollar instability, and inflation.

2. Economic Uncertainty Under Trump’s Second Term
   President Donald Trump’s policies are introducing uncertainty into global markets. While his administration is bullish on economic growth, concerns about trade wars, fiscal policy, and geopolitical tensions are driving investors toward gold as a hedge.

3. A Response to Banking Fragility
   Gold’s rally gained momentum after the collapse of Silicon Valley Bank in 2023. This event reminded investors of systemic risks in the financial sector, reinforcing gold’s role as a hedge against banking crises.

4. Inflation and Real Interest Rates
   Despite the Federal Reserve’s efforts to control inflation, real interest rates remain a key driver of gold prices. When adjusted for inflation, lower real yields increase the attractiveness of non-yielding assets like gold.

Bitcoin vs. Gold: A Battle for Safe-Haven Status?

Bitcoin’s rise alongside gold has sparked a fierce debate over the future of safe-haven assets. Traditionally, gold has been the go-to hedge against inflation, economic uncertainty, and geopolitical turmoil. But as the digital age accelerates, bitcoin is emerging as a competitor, often dubbed “digital gold.” Both assets thrive in times of financial stress, but their underlying mechanics and long-term trajectories differ sharply.

Bitcoin’s rise alongside gold challenges the notion that precious metals are the only safe-haven assets. Trump’s aggressive pro-crypto stance, including discussions of a strategic U.S. bitcoin reserve, has pushed the cryptocurrency into mainstream finance and further fueled Bitcoin's changing narrative over time. Initially conceived as a peer-to-peer payment system, it has increasingly become a speculative investment and a store of value. Unlike gold, which has been a recognized monetary asset for thousands of years, bitcoin is just 16 years old. Yet, in that short time, it has outperformed nearly every other asset class, posting exponential gains—despite extreme volatility.

One of bitcoin’s greatest strengths is its fixed supply. While gold mining continues indefinitely, bitcoin’s total supply is capped at 21 million coins, with the final bitcoin expected to be mined around 2140. This built-in scarcity is a key reason why some investors, including major asset managers like BlackRock, have compared it favorably to gold. If demand continues to grow while supply remains fixed, bitcoin’s price could theoretically rise indefinitely.

Now, under President Trump, bitcoin is entering a new phase: potential government endorsement. His administration has proposed creating a U.S. strategic bitcoin reserve, treating the asset similarly to gold or oil stockpiles. If implemented, this would mark a seismic shift in the financial landscape, effectively integrating bitcoin into national economic policy.

Bitcoin as a National Reserve Asset?

Senator Cynthia Lummis has been leading efforts to establish a national bitcoin stockpile, proposing annual government purchases of 200,000 bitcoins for five years. This plan is based on the idea that bitcoin’s rising value could help reduce U.S. debt and provide a hedge against monetary debasement.

If the U.S. moves forward with such a strategy, it could trigger a domino effect among other nations. The Czech Republic’s central bank is already considering adding bitcoin to its reserves, though European regulators remain skeptical. Christine Lagarde, president of the European Central Bank, has dismissed the idea, stating that reserves must be "liquid, secure, and safe"—qualities she argues bitcoin lacks.

Bitcoin’s future as a reserve asset largely depends on its ability to mature as a financial instrument. Gold has been the anchor for central bank reserves due to its stability and historical role. Bitcoin, on the other hand, remains highly volatile. While its price has risen dramatically, it has also experienced deep crashes, including an 80% drop in 2018 and another 60% decline in 2022.

For bitcoin to become a reliable reserve asset, it will need greater stability and liquidity. Institutional adoption is helping in this regard. Major financial players such as BlackRock, Fidelity, and Goldman Sachs are now offering bitcoin-related investment products, signaling that Wall Street is increasingly comfortable with crypto.

The Risks: Is Bitcoin the Next Bubble?

Despite its strong performance, bitcoin still faces major risks that gold does not.

• Regulatory Uncertainty: While Trump is embracing crypto, future administrations may not be as friendly. Governments worldwide continue to debate how to regulate bitcoin, particularly regarding tax implications, anti-money laundering (AML) concerns, and financial stability risks. If stricter regulations are imposed, bitcoin’s appeal as a hedge asset could weaken.

• Volatility and Market Manipulation: Bitcoin remains far more volatile than gold. Institutional investment has dampened some of this volatility, but the market is still prone to sharp price swings. Unlike gold, which has a well-established global market, bitcoin’s price can be heavily influenced by speculation, whale movements (large holders dumping assets), and exchange failures.

Bitcoin is far more volatile than other financial assets / 30-day rolling standard deviation of prices and index levels (%)

_{Source: FT calculations, LSEG • Prices for bitcoin and gold in US dollars}

• The Risk of Technological Disruption: Bitcoin is the first and most successful cryptocurrency, but it is not immune to competition. Other blockchain technologies, including ethereum, are evolving and could challenge bitcoin’s dominance. Moreover, potential advancements in quantum computing could pose a security threat to bitcoin’s cryptographic foundations.

• Will People Spend or Hoard Bitcoin: One fundamental issue is that bitcoin holders often refuse to spend it, expecting future price appreciation. This runs counter to its original vision as a digital currency. While gold is physically stored and rarely used in daily transactions, it has a functional role in jewelry, industry, and central bank reserves. Bitcoin’s utility as a medium of exchange remains limited.

The Future: Bitcoin and Gold Can Coexist

Gold’s value lies in its historical reliability, physical tangibility, and universal acceptance. Bitcoin, on the other hand, represents a new digital paradigm—an asset class that could either revolutionize finance or become another speculative bubble.

However, the two are not mutually exclusive. Many investors now see gold and bitcoin as complementary rather than competing. While gold provides stability and a proven hedge against inflation, bitcoin offers high potential upside and a hedge against monetary debasement in the digital age.

However, bitcoin remains highly volatile. While gold has experienced slow, steady appreciation, bitcoin’s boom-bust cycles have been extreme. The cryptocurrency’s recent surge above $100,000 was met with steep corrections, reinforcing concerns about its role as a reliable hedge.

The Stock Market’s Quiet Strength

While gold (and bitcoin) is capturing headlines, the S&P 500 continues to climb, albeit at a slower pace. Investors remain bullish on equities, particularly in sectors like AI and tech, which continue to attract strong capital flows.

The stock market’s performance signals optimism about economic growth. Historically, gold shines when equities struggle, yet both are hitting record highs simultaneously—a rare occurrence. This echoes previous periods of synchronized gains, such as 2005-2007, ahead of the global financial crisis, and mid-2020, during the post-pandemic stimulus boom.

For now, equity investors remain confident. But if market sentiment shifts—whether due to interest rate hikes, corporate earnings disappointments, or macroeconomic shocks—gold’s rally may find even more fuel.

5 PROMPTS THAT ATHLETES CAN USE TO DEVELOP AND BUILD EXPERTISE

• How can gold and bitcoin serve as hedges against economic uncertainty, and what factors influence their value fluctuations?

• What are the key differences between gold and bitcoin as investment assets, and how can a diversified portfolio incorporate both effectively?

• How do central bank policies and macroeconomic trends impact gold prices, and what signals should investors watch for when evaluating gold as a store of value?

• What lessons can athletes-turned-investors learn from bitcoin’s volatility and gold’s historical stability when managing wealth in uncertain financial landscapes?

• If bitcoin is increasingly being considered as a strategic reserve asset, what potential impacts could this have on global finance, and how should business-minded athletes prepare for this shift?

👉 Check ChampionsChat GPT for your prompts.

Can Gold Hold $3,000?

Reaching a psychological milestone like $3,000 is one thing, but sustaining it is another. History suggests that gold struggles to maintain big round-number levels. After first breaching $1,000 in 2008, it spent years oscillating before firmly moving higher. Similarly, after surpassing $2,000 in 2020, gold spent 90% of the next 28 months below that mark.

This time, however, central bank buying and geopolitical risks may provide a stronger floor for prices. Gold’s rally isn’t just about inflation hedging; it’s about a global reallocation of reserves away from the U.S. dollar. According to Bank of America, gold now makes up 16% of global bank reserves, while the Dollar's share has dropped from over 70% in 2002 to about 58%.

Still, some investors may see $3,000 as a selling point rather than a reason to buy. Private sector demand tends to be more price-sensitive than central bank accumulation. If speculative flows reverse, gold could face short-term pressure.

The Bigger Picture: A Hedge for an Uncertain World

Gold’s resurgence underscores rising anxiety in financial markets. While stocks signal confidence and bitcoin captures speculative capital, gold remains the ultimate crisis hedge.

As Trump’s policies unfold, geopolitical tensions simmer, and financial markets remain volatile, gold’s appeal as a store of value is stronger than ever. Yet, in a world where digital assets and traditional finance are converging, the battle between gold and bitcoin for safe-haven dominance will only intensify.

Bitcoin has proven its ability to generate massive wealth, but it has yet to demonstrate long-term stability. Gold, with its deep-rooted history, remains the go-to safe-haven asset for central banks and conservative investors.

However, if current trends continue—especially the rise of government-backed bitcoin reserves—the cryptocurrency may carve out a permanent place in financial markets. Whether it can dethrone gold as the ultimate hedge remains an open question, but for now, the world may need both assets to navigate the uncertainties ahead.

One thing is clear: gold’s surge past $3,000 is more than just a market rally—it’s a reflection of a world increasingly uncertain about its economic future.

👇

I really appreciate you reading my note today.

Have a wonderful winter day. Snow, snow, snow. At least for me...

Best,

Irg

Irg’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. This work may feature assets and entities in which the author has invested.

🙏 Thanks for reading Irg's Athletes in Business Notes! Subscribe for free to receive new notes and support my work.

© 2024 Athletes in Business Notes by Patparius GmbH