Safe-haven appeal of gold and bonds may wane with Bitcoin

Bitcoin may not fit the traditional definition of a safe haven, but in an environment of rising sovereign risks and broken financial norms, it may be time to rethink the very concept of “safety.”

James Van Straten | Edited by Aoyon Ashraf April 12, 2025, 1:00 PM

What you need to know:

• Gold has risen in price by 90% over the past five years, but given that more than 40% of the entire dollar supply was created in 2020 alone, it has barely kept up with inflation.
• Bitcoin's short-term volatility stands in stark contrast to its long-term stability: Since the COVID-induced market crash, it has outperformed all major asset classes, posting gains of 1,000%.

The concept of safe-haven assets – traditionally such as gold and government bonds – is under pressure like never before in the face of market turmoil.

For years, portfolio construction and risk management remained simple: 60% stocks, 40% bonds, and when markets began to panic, capital was usually funneled into gold and government bonds. These assets were slow, stable, and predictable, making them ideal for investors seeking protection from volatility. But in today’s world of 24-hour markets, geopolitical instability, and growing distrust of government systems, that logic has been called into question, raising the question: Is it time to rethink the definition of a safe haven?

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A new player appears on the scene: Bitcoin.

It is highly volatile, often misunderstood, and viewed as a speculative asset by many analysts on Wall Street and Main Street. However, it has shown incredible gains since the COVID-19 market lows.

Bitcoin has risen more than 1,000% since the COVID-19 market crash in March 2020. Meanwhile, long-term bonds — as measured by the iShares 20+ Year Treasury Bond ETF (TLT) — are down 50% from their 2020 highs. Even safe-haven gold — which has risen 90% over the past five years — looks less impressive when you consider the currency debasement that has resulted in more than 40% of the entire dollar money supply being printed in 2020 alone.

However, Bitcoin's status as a safe haven asset continues to be a contentious issue among investors.

In several recent risk-off instances, it has acted not as a hedge, but rather as a high-beta volatility asset relative to the Invesco QQQ Trust, Series 1 ETF.

• Covid-19 (March 2020): BTC down 40% while QQQ down 27%
• Banking Crisis (March 2023): BTC -14%, QQQ -7%
• Yen Trading Taper (August 2024): BTC -20%, QQQ -6%
• Tariff Selloff (April 2025): BTC -11%, QQQ -16%