Gold and Bitcoin share a common investment thesis: both are seen by some as safe-haven assets due to their limited supply. This scarcity means their value tends to rise as demand increases, making them attractive hedges against the weakening U.S. dollar and other fiat currencies.
The U.S. Dollar Index has dropped 8% so far in 2025 amid concerns over the Trump administration’s trade and fiscal policies. In contrast, gold and Bitcoin prices have climbed 24% and 18%, respectively, reflecting investor interest in alternative stores of value.
However, while gold outperformed in the first half of 2025, JPMorgan Chase analyst Nikolaos Panigirtzoglou expects Bitcoin to potentially outperform gold in the second half of the year.
Easy Exposure Through ETFs
Investors can directly purchase gold bullion or Bitcoin via cryptocurrency exchanges like Coinbase. But physical gold is costly and cumbersome to store, while Bitcoin ownership involves high transaction fees and complex digital security.
Exchange-traded funds (ETFs) solve these problems by offering easy, cost-effective access. The SPDR Gold Shares (NYSEMKT: GLD) is the largest gold ETF, tracking gold’s spot price with an expense ratio of 0.4%. The iShares Bitcoin Trust (NASDAQ: IBIT) is the largest spot Bitcoin ETF, charging a lower expense ratio of 0.25%.
Gold and Bitcoin as Hedges Against Market Downturns
JPMorgan analysts identify catalysts that could boost Bitcoin’s performance. Several companies, including Strategy (formerly MicroStrategy), have added Bitcoin to their balance sheets, with plans to invest $57 billion more by 2027. Additionally, states like Arizona and New Hampshire have created strategic Bitcoin reserves, with others considering similar moves, potentially sustaining demand.
Despite this, JPMorgan regards gold as the safer choice for cautious investors. Gold offers protection against geopolitical risks and further dollar weakness. Conversely, the analysts warn that Bitcoin’s volatility might undermine portfolio stability, despite its low correlation with traditional assets.
The Economic Backdrop Fuels Demand
The Trump administration’s tariffs are expected to raise prices and slow growth. Meanwhile, the recent House-approved tax and spending bill could add $3 trillion to federal debt over the next decade. These factors contribute to reduced confidence in U.S. stocks, bonds, and currency, pushing some investors toward gold and Bitcoin.
Whether this trend intensifies remains uncertain. Investors wary of stock market declines and dollar devaluation may consider hedging with gold or Bitcoin. For those intolerant of volatility, gold is a more prudent choice. Still, Bitcoin could outperform over time as adoption by companies and governments grows.
Should You Invest $1,000 in Bitcoin Now?
Before investing, consider that top analysts at Motley Fool’s Stock Advisor recently named their 10 best stocks—but Bitcoin was not included. Past recommendations, like Netflix in 2004 and Nvidia in 2005, have generated extraordinary returns for investors who followed the advice.
Investing in Bitcoin may offer growth potential, but it remains riskier than traditional stocks favored by many experts.
