Bitcoin is facing renewed scrutiny as institutional players reassess its role in global finance. Asset manager Grayscale recently suggested that Bitcoin is currently behaving more like a technology-linked risk asset than the widely promoted “digital gold” narrative.
Grayscale Challenges the Digital Gold Narrative
Asset manager Grayscale has made a surprising comment on the long-standing, controversial claims that Bitcoin is digital gold. In a recent blog post, the firm’s Head of Research, Zach Pandl, stated that Bitcoin is a hybrid asset class. According to Pandl, Bitcoin is currently trading in tandem with software stocks, highlighting its strong correlation with risk assets.
Interestingly, during the recent stock market sell-off, Bitcoin fell in lockstep with technology equities, reinforcing the idea that BTC behaves more like an emerging technology asset than a traditional safe-haven asset. However, Bitcoin, like gold, can still be considered a long-term store of value due to its capped supply, independence from government control, and decentralized structure.
Pandl also noted in the report that the Bitcoin network will likely continue to exist beyond our lifetimes, and the asset may retain its value in real terms over extended periods. However, unlike gold, Bitcoin is still early in its monetary journey compared to the precious metal, which has existed for millennia and is already globally recognized as a store of value.
Current Bitcoin Performance Negates Safe Haven Claims
Meanwhile, Bitcoin’s performance relative to gold in recent times has made the narrative of BTC being digital gold grow increasingly thin. During the recent market drawdown, Bitcoin briefly crashed to around $60,000, a roughly 50% drop from its all-time high, before quickly rebounding to $70,000. Rather than serving as a safe haven, Bitcoin instead mirrored broader risk assets, prompting investors to rush toward traditional safety instruments.
Gold, on the other hand, has surged to a record high above $5,500, while recording strong capital inflows, even as Bitcoin has reportedly seen significant capital exits. This divergence has weakened the argument that Bitcoin consistently holds value during periods of market stress and heightened volatility when compared directly to gold.
Meanwhile, Pandl added in the report that unless Bitcoin is widely adopted as a global monetary asset, it will likely remain sensitive to broader market risk appetite. Under such conditions, Bitcoin may continue to rise and fall in line with growth-oriented portfolios rather than consistently acting as a hedge and store of value during periods of financial volatility.
Interestingly, Bitcoin has gained additional adoption in recent years, driven by the introduction of Bitcoin ETFs and growing corporate treasury allocations. However, it is yet to gain the same level of global acceptance as gold, which, until the early 1970s, served as the foundation of the international monetary system. Gold also remains the second-largest asset held in official global reserves after the U.S. dollar, highlighting its entrenched role in global finance compared to Bitcoin’s still-developing status as a monetary asset.
Despite this, Wall Street giant JPMorgan believes that Bitcoin’s lower volatility relative to gold over specific periods could make it more attractive to investors in the long term, particularly as market infrastructure matures and institutional participation deepens.
Evans Kelvin
Temitope Olajide
