Gold Still Outshines Bitcoin as a Downturn Hedge, Says Bloomberg Intelligence Analyst

Gold remains the more dependable safe haven when equity markets stumble, according to Bloomberg Intelligence’s Athanasios Psarofagis.

Speaking on Bloomberg TV’s ETF IQ, Psarofagis noted that the precious metal has a stronger track record of holding value during S&P 500 sell-offs, while Bitcoin often declines alongside risk assets.

In bullish markets, however, Bitcoin’s performance can far exceed gold’s. “Bitcoin has the kind of explosive returns that gold can’t match when markets are strong,” Psarofagis said. But during risk-off periods, gold’s resilience gives it an edge as a defensive asset.

Psarofagis pushed back against the common narrative that Bitcoin serves as a reliable hedge against inflation or broader market turmoil. Instead, he sees the cryptocurrency functioning more as a hedge against global money supply expansion, thriving when liquidity is abundant but faltering when sentiment turns negative.

Even gold, he cautioned, is not a perfect shield during downturns. Both assets carry volatility, though Bitcoin’s swings are far more pronounced. Part of the reason, he explained, is that Bitcoin’s role in the financial system remains unresolved — whether it is primarily a currency, a store of value, or simply a speculative instrument.

One area where Bitcoin holds a clear structural advantage is its fixed supply of 21 million coins, which cannot be inflated by governments. This scarcity has fueled Bitcoin’s gains during expansionary periods, even if it has failed to consistently protect portfolios during equity market shocks, particularly when technology stocks suffer steep losses.

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.