Investors Cash In on Gold and Bitcoin Amid Market Turmoil
Investors seeking safety through gold are currently reaping significant rewards during this period of global market instability. Meanwhile, those who opted for “digital gold,” or bitcoin, are also witnessing gains. The volatility in the markets, largely driven by tariffs, pushed gold futures to unprecedented levels in April, reaching above $3,400 for the first time. Although prices have since retreated, they are still up nearly 26% year to date, as investors flock to gold amid a weakening dollar and increasing trade tensions.
Bitcoin has also experienced an upward trend this year, albeit not on the same scale as gold. After hitting its lowest point of the year on April 8, bitcoin has surged almost 20%, though it remains less than 1% higher in 2025. Nevertheless, bitcoin’s performance outstrips the S&P 500’s decline of over 6% this year.
The relationship between gold and bitcoin has been mostly positive from 2020 through 2024; however, it began to weaken in recent months. The shifts in bitcoin during April suggest a potential restoration of its correlation with gold. An analysis by CNBC using FactSet data revealed that the 25-week rolling correlation between the two assets hit a low of -0.42 by March’s end, indicating minimal linear relationship, whereas a correlation of -1 would denote a strong inverse relationship.
In April, the correlation between gold and bitcoin increased, settling at -0.28. This indicates that a 1% increase in gold could result in a 0.28% decrease in bitcoin. Art Hogan, chief market strategist at B. Riley Wealth Management, attributes this rise in correlation to a shift in investor perspectives. Bitcoin is increasingly seen as a portfolio diversifier rather than merely a risk-on asset.
Hogan notes that the rise of bitcoin as a potential alternative investment, akin to gold, is a significant shift from previous perceptions in which it was closely linked to high-risk tech stocks. This new view may have been influenced by market instabilities following the tariffs announced by President Donald Trump on April 2, encouraging investors to look for less correlated assets.
Despite a less negative correlation, it’s important to recognize that fundamental differences between bitcoin and gold persist. Many investors continue to view gold as a hedge against inflation, which remains above the Federal Reserve’s 2% target. Jeff Kilburg, founder and CEO of KKM Financial, emphasizes these differences, noting that the profiles of bitcoin and gold investors can vary significantly.
Geoff Kendrick, Standard Chartered’s global head of digital assets research, suggests that, despite bitcoin’s April surge, it generally exhibits a stronger correlation with the Nasdaq than with gold. He advises investors to consider bitcoin as both an additional tech stock and a hedge against traditional finance, thereby combining the advantages of both worlds.
