Crypto investors have long referred to Bitcoin as “digital gold.” If that’s the case, then Bitcoin (BTC -0.79%) — just like gold — should act as a hedge against the type of market volatility and economic uncertainty investors are currently experiencing.

But consider what’s happening right now. The price of gold just soared past $3,000 to hit a new all-time high and is now up 15% for the year. In contrast, Bitcoin has fallen nearly 20% from an all-time high of $109,000 in January.

Gold appears to be on the way up, while Bitcoin — at least for the current moment — seems to be heading down. So, which is the better buy right now? The answer to that question may not be as obvious as you think.

Bitcoin: Digital gold or tech stock?

A key factor to keep in mind is Bitcoin’s correlation with the stock market. For much of its history, Bitcoin was completely uncorrelated with the stock market, and that was what made it so attractive to many investors. In 2024, WisdomTree (WT -0.54%) did a comprehensive study on Bitcoin and could find no correlation with equities, except for a few brief periods dating all the way back to 2012.

In many ways, this lack of correlation made Bitcoin the ultimate portfolio diversifier. It’s not just that Bitcoin was uncorrelated with the stock market — it was uncorrelated with every major asset class. It seemed undeniably unique, and Wall Street bought into the idea of Bitcoin as a potential hedge against economic uncertainty and market volatility.

But something very strange has been happening in 2025: Bitcoin is starting to behave more and more like a tech stock. And there’s a mounting body of statistical evidence to back this up.

In March, British mega-bank Standard Chartered took a closer look at Bitcoin’s correlation with stocks and found that Bitcoin’s correlation with the Nasdaq is now 0.5 and had peaked as high as 0.8 earlier in the year. At the same time, Bitcoin appears to have lost its correlation with gold, which is now just 0.2 after briefly touching zero earlier in the year.

Those numerical changes might seem small, but they are momentous in the eyes of investors. They suggest that Bitcoin may no longer be a safe haven asset. Of course, correlations change over time, but Bitcoin is now marching in lockstep with tech. Quite simply, buying Bitcoin is just like buying a volatile tech stock these days. If tech stocks go down, Bitcoin will go down, too. And if tech stocks rise, Bitcoin will also rise.

Image source: Getty Images.

Any argument that Bitcoin is digital gold now appears to be wishful thinking. How can Bitcoin be digital gold if it’s not even correlated with gold? And why is Bitcoin falling in price if it’s a hedge against economic uncertainty?

Where is the economy headed in 2025?

Understandably, many Bitcoin investors (just like tech stock investors) have become obsessed with the latest U.S. macroeconomic data. All of it — inflation reports, consumer confidence reports, gross domestic product (GDP) reports — is critical to understanding where Bitcoin is headed next.

The potential impact of large-scale, across-the-board tariffs is still very much unknown. If they tip the U.S. economy into recession at the same time that prices are rising due to tariffs, things could get very ugly. Just ask ChatGPT about what happened during the 1970s when stagflation became the new economic buzzword.

According to conventional wisdom, you buy gold if you think the economy is headed for a recession because of tariffs. And if you think the economy will bounce back stronger than before as a result of America-first tariffs, you buy Bitcoin.

Will gold really outperform Bitcoin in 2025?

Based on the latest economic data, Goldman Sachs predicts that gold could hit a price of $3,300 before the end of 2025. That’s a 10% hike from its current price of $3,000.

But guess what? Bitcoin can increase in price by 10% within a single 24-hour trading period. That type of performance over the next 9 months doesn’t seem like a high bar to reach for Bitcoin, not when it has a historical record of delivering triple-digit annual returns.

So, even though gold seems like the obvious, no-brainer investment right now and Bitcoin is behaving more and more like a tech stock, I’m still picking Bitcoin. At the end of the day, I’m convinced that Bitcoin will outperform gold in 2025.