As gold continues to hit new highs, cryptocurrencies like Bitcoin, which are touted as momentum trading tools and "currency devaluation" instruments, are experiencing stagnant prices, hovering around $87,000. Trading volume remains weak, down 25% since October last year, with a 6% decline in just the past seven days.

Long-term Bitcoin investors are therefore shifting towards more reliable markets such as stocks and precious metals. Data compiled by media shows that over the past week, investors have withdrawn more than $1.3 billion from Bitcoin-related funds, part of the overall outflow from cryptocurrency ETFs. These withdrawals followed a brief inflow of funds in early January, indicating a rapid shift in market sentiment after the New Year.
Currently, as investors seek safe havens amid geopolitical risks and a weakening dollar, the precious metals market is attracting significant capital inflows. Stocks, especially technology and small-cap stocks, have also continued to rise this year. A report released last week by JPMorgan states that broad-based stock ETFs are experiencing the largest ever capital inflows, while cryptocurrency ETFs are facing outflows. Stephane Ouellette, CEO and co-founder of FRNT Financial Inc., said, “The cryptocurrency market is undoubtedly going through a tough period. There are many competitive factors in the crypto space right now: from an innovation perspective, artificial intelligence (AI) has received substantial investment over the past year. Meanwhile, cryptocurrencies are currently excluded from inflation hedging strategies.” This has once again raised questions about Bitcoin’s role as a macro hedge. Duke University professor Cam Harvey wrote, “Bitcoin is unlikely to replace gold as investors’ preferred safe-haven asset.”
Analysts at cryptocurrency firm Tagus Capital have recently reached a similar conclusion. They stated, “Bitcoin’s returns may respond to concerns beyond inflation, such as a loose monetary environment and fears of fiat devaluation, but academic research shows that this hedge is sporadic, weaker than gold, and heavily influenced by risk appetite, liquidity, and stock-like factors, rather than a stable correlation with a weakening dollar.”