- JP Morgan reports investors are choosing Gold over Bitcoin during recent market volatility caused by Trump’s trade policies.
- Gold has reached a new high above $3,660 while Bitcoin remains more than 20% below its January record.
- Bitcoin ETFs in the US have lost ground to gold ETFs after briefly overtaking them last December.
JP Morgan analysts have determined that Bitcoin is failing to serve as a safe-haven asset during recent market turmoil sparked by President Trump’s global trade war. According to a Thursday report from the investment bank, investors are instead flocking to gold exchange-traded funds and futures as they seek more reliable protection for their capital amid growing economic uncertainty.
Gold prices have climbed to unprecedented levels, surpassing $3,660 per ounce this week. Meanwhile, Bitcoin has experienced a significant correction since breaking its record in January, now trading more than 20% below its all-time high of nearly $109,000, which coincided with Trump’s inauguration day on January 20.
“Bitcoin has failed to benefit from the safe haven flows that have been supporting gold in recent months,” stated the JP Morgan report. The analysis highlighted that while gold ETFs have seen substantial inflows, investors have been withdrawing funds from newly established American cryptocurrency ETFs.
Bitcoin’s Changing Correlation Patterns
Though Bitcoin has historically been described as “digital gold” and has previously shown correlation with the precious metal, recent years have seen the cryptocurrency’s price movements more closely aligned with U.S. equities, particularly with tech stocks. This shift has undermined Bitcoin’s claimed status as a hedge against traditional market instability.
Bitcoin ETFs in the United States temporarily surpassed their gold counterparts in December, driven by cryptocurrency price appreciation. However, this advantage proved short-lived as investors have since returned to traditional safe havens.
Market Performance Amid Economic Concerns
Bitcoin was trading near $85,000 on Wednesday, approximately where it started April, according to data from CoinGecko. Despite remaining flat for the month, Bitcoin has outperformed major equity indexes, with both the S&P 500 and Nasdaq declining by roughly 6% during the same period.
Trump’s November election initially provided a boost to cryptocurrency prices as his campaign promised to reduce regulations considered unfair by the industry. However, a combination of geopolitical uncertainty, aggressive tariff policies, and recession fears have prompted investors to seek refuge in gold rather than digital assets.
The current market dynamics suggest that despite Bitcoin’s improved performance compared to equities, its narrative as a reliable safe haven during times of market stress has yet to materialize in the way many crypto advocates have predicted.
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