Hedging in 2025: Should Investors Turn to Bitcoin or Gold?

As cryptocurrency gains broader acceptance, questions arise about whether gold remains the go-to hedge for investors. André Dragosch, European head of research at Bitwise Asset Management, argues that the choice isn’t about replacing one with the other—gold and bitcoin serve distinct roles in today’s markets.

Gold Shields Against Equity Downturns
Historical patterns reinforce gold’s role as a safe haven. Its correlation with the S&P 500 has hovered near zero, often turning negative during periods of market stress. In 2022, for example, gold rose roughly 5% while the S&P 500 declined nearly 20%, highlighting its ability to cushion portfolios during stock market volatility.

Bitcoin Responds to Bond Market Stress
Bitcoin behaves differently. While it can falter during equity sell-offs, it shows a low or slightly negative correlation with U.S. Treasuries. When bond prices fall and yields rise, bitcoin has at times outperformed gold, providing a hedge against interest rate pressures and fiscal concerns.

2025 Performance Snapshot
Year-to-date through August, gold has gained more than 30%, benefiting from equity market jitters. Bitcoin has risen roughly 16.5%, holding ground even as 10-year Treasury yields declined about 7.3%. The S&P 500, in contrast, is up approximately 10% in 2025. These divergences illustrate Dragosch’s point: gold is ideal for cushioning equities, while bitcoin can hedge bond-related risks.

Strategic Portfolio Implications
Research from Bitwise emphasizes the value of holding both assets. Gold mitigates stock market exposure, bitcoin can offset bond market volatility, and together they enhance portfolio diversification and risk-adjusted returns.

Considerations and Caveats
Correlations are not fixed. Bitcoin’s rising institutional adoption, particularly via spot ETFs, has increased its sensitivity to market fluctuations, reducing its purity as a bond hedge. Short-term shocks, regulatory developments, or liquidity events could move both assets in the same direction.

Dragosch concludes that gold remains relevant. Investors should view gold and bitcoin as complementary tools—each hedges different risks, and using both may offer the most resilient strategy for 2025.