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Bitcoin and gold, which is a better investment option in 2025?
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Gold could reach $3,300 by the end of 2025. That’s a 10% increase from the current price of $3,000. But guess what? Bitcoin could rise 10% in a 24-hour trading period. Over the next nine months, this performance doesn’t seem difficult for Bitcoin, which has a history of triple-digit annual returns.
Bitcoin is becoming more and more like a tech stock. There is growing statistical evidence to support this view. In March, Standard Chartered, a large British bank, took a closer look at Bitcoin's correlation with the stock market and found that Bitcoin's correlation with the Nasdaq is now 0.5, having been as high as 0.8 earlier this year. At the same time, Bitcoin's correlation with gold seems to have been lost, now only 0.2, and even zero earlier this year.
The potential impact of large-scale, across-the-board tariffs remains unknown. If these tariffs push the U.S. economy into a recession while prices rise due to the tariffs, things could get really bad. Just ask ChatGPT what happened in the 1970s when stagflation became the new economic buzzword. Conventional wisdom dictates that if you think the economy will go into recession due to tariffs, you should buy gold, and if you think the economy will rebound strongly due to an “America First” tariff policy, you should buy Bitcoin.
In simple terms, buying Bitcoin now is like buying a volatile tech stock. If tech stocks go down, Bitcoin will go down; if tech stocks go up, Bitcoin will go up.
Cryptocurrency investors have long referred to Bitcoin as digital gold. If that is true, then Bitcoin, like gold, should be able to hedge against the market volatility and economic uncertainty that investors are currently experiencing.
