Gold vs Bitcoin: Which Asset Will Rule 2025 Return Book?

Gold vs. Bitcoin: The initial 2 months of 2025 went in a pure bloodbath for equity market investors. However, for other asset classes, like gold and cryptocurrency, the return book played quite differently even as uncertainty continued to dominate the geopolitical sphere owing to Trump's new regulatory book. So far this year, gold price has surged over 12% as investors rushed to safe-haven assets, thanks to the US's tariff play, creating supply-chain uncertainty and raising concerns over inflation.

In the last month alone, the yellow metal surged by nearly 3% despite stock markets remaining in red. The S&P 500 index dropped over 1.5% during the same period. Tech-heavy index, Nasdaq, also failed to impress investors with negative returns of nearly 4%.

As for domestic benchmark indices— Sensex and Nifty—plummeted around 5% in the last month. With turbulent macros and an uncertain outlook ahead, investors are parking their money in gold.

While this might seem like investors are shifting back to traditional assets, it would be a mistake to overlook cryptocurrency's trajectory, which is considered among the most risky asset classes. It's not just Bitcoin alone, attracting investor interest, but other crypto coins like ADA, XRP and Ethereum, as well. The rally in the digital asset class was largely seen after Trump's open support for cryptocurrencies and his prospective plan for a 'crypto strategic reserve'.

"A US Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the US is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!" Trump said in a social media post.

It's not just Bitcoin

While Bitcoin remains the dominant cryptocurrency in the digital asset sphere, many are estimating other crypto coins with limited market share to start gaining momentum at a much faster pace. When Trump first mentioned about 'crypto reserve,' Bitcoin saw a slight uptick, but other digital coins like ADA, SOL and XRP jumped as much as 50%.

Market analysts believe that Bitcoin might remain in momentum this year but lose its 'dominant crypto' tag in 2025, as several altcoins come into view. But the overall outlook remains bullish.

Earlier this year, Goldman Sachs ramped up its investments in Bitcoin and Ethereum exchange-traded funds (ETFs) in Q4. According to a regulatory filing, the financial firm increased its Ethereum ETF holdings by a whopping 2,000% and Bitcoin ETF holdings to nearly $1.5 billion, reportedly. Trump's open inclination towards digital currency has kept the sentiments around the cryptocurrency strong, despite high volatility.

Hard to ignore gold

The surge witnessed by many crypto coins so far this year is surely attractive, but it's hard to ignore the volatility present in the asset class. This is where gold, as a safe-haven asset, wins the return book. Last year, the yellow metal surged by over 25% and analysts are already expecting a similar replication of the rally this year.

Some even point out that gold prices might touch the $3,000 price level. Uncertainty has forced central banks, and not just individual investors, to increase their gold holdings, pushing prices on an uptrend. “We maintain our multi-year bullish outlook on gold. From a macro perspective, a universal tariff scenario would likely supercharge the broad price effects for precious metals. Boosted economic growth concerns and higher inflation risks could continue to fuel strong investor demand for gold,” said Natasha Kaneva, head of Global Commodities Strategy at J.P. Morgan.

Much of the outlook ahead will depend on key data releases and how Trump's tariff book plays out, investors are advised to take calculated risk as uncertainty continues to loom over geopolitical sphere.