Since April 2025, the trends of gold and Bitcoin have diverged significantly: from the beginning of the year to early May, the cumulative increase of gold was nearly 30%, while that of Bitcoin was only about 4%. However, the trend reversed after late April - JPMorgan analysts pointed out that Bitcoin has rebounded rapidly since late April (up nearly 18% as of mid-May), while gold has fallen back (down about 8% since April 22). In terms of specific prices, the price of Bitcoin once exceeded $104,000 in early May, close to the record high at the beginning of the year (about $107,000); while the price of gold rose and fell due to multiple factors during the same period. In particular, after the progress of the Sino-US trade negotiations on May 12, the market's risk aversion cooled down, and the London gold price fell from about $3,394/ounce on May 7 to $3,127/ounce on May 15, with a cumulative decline of 7.8%. Overall, the divergent performance of gold under pressure to fall after May 12 and Bitcoin remaining strong has become a distinctive feature of the recent market. JPMorgan Chase analyzed that at this stage, investors have parted ways on the "currency depreciation" hedging strategy, and the previous situation of resonance between gold and Bitcoin has turned into a zero-sum game, with Bitcoin gaining the upper hand.
ETF fund flows and institutional allocations
The flow of funds further highlights the above-mentioned differentiation. Taking the United States as an example, funds are pouring into Bitcoin spot ETFs on a large scale, while gold ETFs are relatively stable. Data shows that BlackRock's Bitcoin ETF (IBIT) has had a net inflow of nearly $6.9 billion since the beginning of the year, which has exceeded the world's largest gold ETF GLD (about $6.5 billion) during the same period. Single-day data in mid-May also reflects the preference of funds: on May 15, IBIT attracted about $410 million in a single day, while Fidelity FBTC outflowed $124 million during the same period.
Overall, IBIT has become the main force in attracting funds. As of early May, its asset size has risen to about US$62.9 billion, and it has received a total of US$4.7 billion in profit inflows for 17 consecutive trading days, with a total inflow of about US$6.9 billion this year. In contrast, although the increase in funds for traditional gold ETFs continues, the pace has slowed down. The SPDR Gold ETF (GLD) currently has a size of about US$101 billion; global gold ETFs increased their holdings by about US$11 billion in April (five consecutive months of net inflows), but as risk aversion demand fell in mid-May, the inflow of gold ETFs may cool down.
In general, capital is trending from gold to crypto assets. CoinDesk and other media pointed out that despite the encouraging rise in gold prices, institutions still favor Bitcoin, and IBIT has surpassed GLD in terms of capital inflows. JPMorgan Chase pointed out that funds have obviously flowed out of gold ETFs recently and flowed into Bitcoin. This phenomenon can be seen in the ETF holdings data: in addition to IBIT, other Bitcoin ETFs have also gained incremental funds, while gold ETF funds have grown steadily, but their share has declined relatively. Some investors have begun to view Bitcoin as part of their allocation of "digital gold", and capital is rebalancing between the two.
Macro background analysis
The macro environment plays a key role in the price of gold, silver and Bitcoin. First, the Fed's policy expectations continue to be tight. Morgan Stanley reported in early April that it currently does not expect the Fed to cut interest rates in 2025. The higher interest rate environment has suppressed the returns of traditional safe-haven assets such as gold. At the same time, U.S. Treasury yields remain high and volatile - the 10-year U.S. Treasury yield hovers around 4.4%, and various assets "lose their low-cost financing advantages."
The US dollar index also remained strong. CME Group analysts believe that the US dollar index will fluctuate at a high level in 2025: On May 14, the US dollar index closed at around 101, mainly due to the stronger performance of the US economy and the widening interest rate gap between the US and Europe and Japan. The European Central Bank and the Bank of Japan are still implementing loose policies, which has caused global funds to flow to the US market, further consolidating the safe-haven status of the US dollar.
A stronger dollar usually suppresses gold: the dollar remains strong, so gold prices are under pressure and it is difficult to rebound significantly. In addition, the Trump administration's trade policies (such as the tariff negotiations mentioned above) also affect capital allocation in the short term by changing global trade costs. In summary, the Fed's maintenance of a tight tone and the continued strength of the dollar have formed a constraint on gold, while also providing Bitcoin with the attribute support of "alternative safe-haven" or "risk asset".
Market structure and risk appetite changes
In terms of market structure, investors' definition of "safe haven assets" is undergoing subtle changes. The rapid rise of Bitcoin in institutional investment portfolios has intensified the discussion of "Bitcoin replacing gold". Asset management institutions such as Barclays and Fidelity have publicly planned to invest heavily in crypto assets; JPMorgan Chase's analysis pointed out that companies and local governments are actively increasing their holdings of Bitcoin reserves (such as New Hampshire allowing 5% of reserves to be allocated to Bitcoin, and Arizona establishing Bitcoin reserves, etc.), indicating that Bitcoin is being seen as a potential diversification tool. From the perspective of ETF flows, Bitcoin ETFs have a greater momentum in attracting funds than gold ETFs, and some comments even predict that the scale of Bitcoin ETFs will reach several times that of gold ETFs in the next 3-5 years.
However, there are also views that warn of caution: Although Bitcoin is called "digital gold", its short-term price fluctuations are closely related to risky assets (especially the Nasdaq index). CME analysis points out that high-volatility assets such as Bitcoin and the Nasdaq are often packaged together, and Bitcoin is often sold to cover risky positions when the Nasdaq falls. This means that Bitcoin still has a high risk preference characteristic and has not completely broken away from the framework of risky assets. In contrast, gold's dual attributes of "anti-inflation + risk aversion" are still favored by central banks and conservative investors.
Overall, the risk aversion logic of institutional investors is evolving: on the one hand, macro risks such as global trade frictions and inflation expectations still provide long-term demand for gold; on the other hand, as an emerging asset, Bitcoin has increasingly strong risk aversion properties due to its massive capital inflows and policy support. JPMorgan Chase even judged that this is already a "zero-sum game" and that Bitcoin is more likely to outperform gold in the future. However, the market is still in the exploratory stage, and whether the pattern of "Bitcoin replacing gold" will really emerge remains to be verified by future trends.
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