Gold has outperformed bitcoin this year, rising 58% since the launch of spot bitcoin ETFs in January 2024. Mark Connors believes bitcoin isn’t ready to rival gold due to infrastructure and historical trust. Despite volatility, gold’s use in trade and international settlement gives it an edge over bitcoin.

BRICS nations like China, India, and Russia are accelerating gold accumulation, using it for oil trades. Bitcoin lacks this trade component, hindering its international settlement use. The gap in performance has widened, with bitcoin down 30% since its peak while gold climbs steadily above $4,100 per ounce.

A liquidity squeeze, driven by U.S. fiscal policy, has impacted both traditional and crypto markets. Bitcoin’s leverage structure makes it hypersensitive to liquidity, especially in Asia. The U.S. government shutdown led to a decrease in liquidity globally, affecting bitcoin more acutely.

Despite the underperformance, signs show liquidity could return to the market with increased Treasury bill issuance. As trust in fiat currencies weakens, bitcoin’s appeal as a neutral asset may grow. However, Connors warns against assuming bitcoin will replace gold soon, as large institutions choose assets based on mandates, where gold fits better.

The divergence between gold and bitcoin suggests that crypto’s path to becoming a global reserve asset may be slower than expected. Trust and habit take time to build, and while bitcoin is still growing, gold’s centuries of existence give it an edge.

Read more at Yahoo Finance: Why Gold Is Winning Over Bitcoin in 2025: Liquidity, Trade, and Trust