Investors Flock to Gold Amid Tariff Uncertainty, but Bitcoin's Safe Haven Narrative Gains Momentum

Gold has been the clear winner in 2025 so far, with a year-to-date gain of 30% and an all-time high price. Despite this impressive performance, investors are not overlooking Bitcoin, often referred to as "digital gold." In fact, the cryptocurrency recently reclaimed its $90,000 price level after weeks of trading below it. This raises the question: which is the better investment right now - gold or Bitcoin? Our analyst team has identified the top 10 stocks to buy in 2025, but should you consider investing in Bitcoin?

The Unique Diversification Properties of Bitcoin

In a report released by BlackRock in September 2024, "Bitcoin: A Unique Diversifier," the company examined the unique diversification properties of Bitcoin. The report found that Bitcoin does not fit into the traditional framework of "risk on" and "risk off" assets. This is due to its scarcity, decentralization, non-sovereignty, and global accessibility. While it is true that Bitcoin is a relatively new technology with an uncertain regulatory future, and its high volatility can be unsettling for investors, BlackRock's report highlights the potential benefits of investing in Bitcoin.

One of the key points made by BlackRock is that Bitcoin has historically been uncorrelated with any major asset class. This means that it can act as a hedge against declining stock prices, making it an attractive option for investors looking to diversify their portfolios. Furthermore, as a global asset completely outside the control of sovereign governments and central banks, Bitcoin is not tied to the economic fortunes of any single nation.

Bitcoin as a Safe Haven

BlackRock's report also highlights the potential of Bitcoin as a safe haven during times of economic and geopolitical uncertainty. The company looked at six recent events that "shocked" the global financial system, such as the outbreak of COVID-19 and the start of the Russia-Ukraine war in 2022, to see how both gold and Bitcoin reacted to these major geopolitical events.

While it might be expected that gold would perform better than Bitcoin over both the short term (10 days out) and the long term (60 days out), BlackRock's findings suggest otherwise. In five of the six cases examined, Bitcoin outperformed gold over the 60-day period, and in three of the six cases, it outperformed gold over the 10-day period as well.

This is not a new phenomenon, as investors have been drawn to Bitcoin during periods of economic instability. As some investors now see it, Bitcoin might actually be a safe haven, especially if economic instability leads to geopolitical instability.

The One Chart that Says It All

All the talk about gold outperforming Bitcoin in 2025 has made many investors forget about the incredible performance of Bitcoin over the past decade. In seven of the past 10 years, Bitcoin has been the best-performing asset class in the world.

Nonetheless, investing is often a game of "what have you done for me lately," so let's compare the performance of Bitcoin and gold over the past year. For the sake of argument, let's use the iShares Bitcoin Trust (NASDAQ: IBIT) from BlackRock as a proxy for the price of Bitcoin, and the iShares Gold Trust (NYSEMKT: IAU) from BlackRock as a proxy for the price of gold.

As shown by data from TradingView, Bitcoin has trounced gold since the launch of the iShares Bitcoin Trust in January 2024. During that time period, the Bitcoin ETF is up 116%, while the gold ETF is up 68%. Even with Bitcoin declining in value this year, and gold soaring in value, the Bitcoin ETF has still outperformed the gold ETF.

What Happens Next with Bitcoin?

The chart clearly shows an inflection point for Bitcoin around "Liberation Day" on April 2. After trading sideways for weeks, Bitcoin suddenly made an upward move. Amidst all the talk about a global trade war and the White House's new spat with the Federal Reserve over interest rates, this upward move might become even more pronounced.

If recent history is any guide, Bitcoin is the one asset that you want to be holding during periods of economic and geopolitical instability. As it turns out, Bitcoin is a lot less risky than many people imagine. And it can often outshine gold, even when you expect it the least. Thus, even after turning in a tarnished start to the year, Bitcoin might still outperform gold in 2025.

Should You Invest $1,000 in Bitcoin Right Now?

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Conclusion

In conclusion, while gold has been the clear winner in 2025 so far, Bitcoin's safe haven narrative is gaining momentum. As investors flock to gold amid tariff uncertainty, they would do well to remember that Bitcoin can often outperform gold during periods of economic and geopolitical instability. With its unique diversification properties and potential as a hedge against declining stock prices, Bitcoin might be the better investment right now.