Given the Trump administration’s vocal and demonstrated support for crypto, some investors are likely wondering whether gold’s days as the world’s favorite hedge asset are numbered.

André Dragosch, European head of research at Bitwise Asset Management, suggests the choice isn’t so simple. In a post on X Saturday, he offered a rule-of-thumb: gold still works best as protection against stock market losses, while bitcoin increasingly acts as a counterweight to bond market stress.

Gold: Hedge of choice

The reasoning starts with history. When equities sell off, investors often rush into gold. Decades of market data back this up. Gold’s long-run correlation with the S&P 500 has hovered near zero, and during market stress, it often dips into negative territory.

For example, in the 2022 bear market, gold prices rose about 5% even as the S&P 500 tumbled nearly 20%. That pattern illustrates why gold is still considered the classic “safe haven.”

Bitcoin: A bond market counterweight

Bitcoin, by contrast, has often struggled during equity panics. In 2022, it collapsed by more than 60% alongside tech stocks. But its relationship with U.S. Treasuries has been more intriguing.

Several studies note that bitcoin has shown a low or even slightly negative correlation with government bonds. That means when bond prices sink and yields rise — as they did in 2023 during fears over U.S. debt and deficits — bitcoin has sometimes held up better than gold.

Dragosch’s takeaway: investors don’t need to pick one over the other. They play different roles. Gold is still the better hedge when stocks wobble, while bitcoin may help portfolios when bond markets are under pressure from rising rates or fiscal worries.

Does it work in 2025?

The split has been clear this year.

As of Aug. 31, gold was up more than 30% year-to-date, according to World Gold Council data. That surge reflects renewed demand during bouts of equity volatility tied to tariffs, slowing growth, and political risk.

Bitcoin, meanwhile, has gained about 16.46% this year, based on CoinDesk Data, a solid performance considering that 10-year U.S. Treasury yields have fallen around 7.33%, according to MarketWatch data.

The S&P 500, by comparison, is up roughly 10% in 2025, per CNBC data.

The diverging performance underscores Dragosch’s heuristic: gold has benefited most from equity jitters, while bitcoin has held its ground as bond markets wobble under the weight of higher yields and heavy government borrowing.

This isn’t just Dragosch’s personal view. A Bitwise research report earlier this year noted that gold remains a reliable hedge against stock market downturns, while bitcoin has tended to provide stronger returns during recoveries and shows lower correlation with U.S. Treasuries.

The report concluded that holding both assets can improve diversification and optimize risk-adjusted returns.

The caveats

Still, correlations aren’t static. Bitcoin’s ties to equities strengthened in 2025 thanks to large inflows into spot ETFs, which have attracted billions from institutional investors.

The huge net inflows into spot Bitcoin ETFs make BTC trade more like a mainstream risk asset, reducing its “purity” as a bond hedge.

Short-term shocks can also scramble the picture. Regulatory surprises, liquidity squeezes, or macro shocks may move both gold and bitcoin in the same direction, limiting their usefulness as hedges. Dragosch’s rule-of-thumb, in other words, is just that — a thesis, not a guarantee.

Trump’s pro-crypto stance raises a provocative question: Is it time to abandon gold entirely in favor of bitcoin? Dragosch’s answer, supported by years of data, is no.

Gold still works best when stocks tumble, while bitcoin may offer shelter when bonds are under pressure. For investors, the lesson isn’t ditching one asset for the other, but recognizing that they hedge different risks — and using both may be the smarter play.