Gold surges past 5000 while Bitcoin pulls back! Wall Street experts fiercely debate who is the true safe haven?

Gold hits a new high of $4,930, approaching $5,000, while silver rises 3.7%. Bitcoin, however, drops to $89,000, down 30% from its peak. Jim Bianco believes the narrative adoption has failed and a new theme is needed. Balchunas counters: a 300% increase over 20 months is just consolidation; early investors cashing out is normal.

The brutal contrast: Gold surges while Bitcoin falls back

The precious metals rally shows no signs of weakening, yet Bitcoin and the broader crypto market remain on the sidelines. On Thursday, gold prices rose 1.7% to $4,930 per ounce; silver increased 3.7% to $96 per ounce. Meanwhile, Bitcoin retreated slightly above $89,000, about 30% below its all-time high set in early October.

Bitcoin and gold exist in the same world, yet Bitcoin’s poor performance over recent months has led Jim Bianco of Bianco Research to question whether the story of Bitcoin’s adoption is over. On X, Bianco noted that in the 14 months following President Trump’s 2024 November election victory, Bitcoin has been in a downtrend across nearly all asset classes. He states Bitcoin fell 2.6%, silver rose 205%, gold up 83%, Nasdaq up 24%, and S&P 500 up 17.6%.

This data is striking. Under the traditional narrative of Bitcoin as the ultimate safe haven (Trump openly supporting crypto, appointing friendly regulators, pushing legislation), Bitcoin is the only major asset to decline. This divergence from market expectations raises fundamental doubts about the “digital gold” narrative.

Silver’s 205% surge is especially remarkable. Traditionally viewed as an industrial metal and a safe-haven asset, its sharp rise reflects both physical economic demand and risk aversion. In contrast, although Bitcoin is also positioned as a safe-haven asset, it failed to perform as such amid rising geopolitical risks and escalating trade tensions, instead falling along with stocks.

“Adoption announcements are no longer effective,” Bianco said. “We need a new theme, but it’s not clear what that is right now. While we wait for a new theme to emerge, everything else is developing rapidly, and Bitcoin remains mired in the mud.” This judgment directly points to the current narrative crisis facing Bitcoin. Large-scale purchases by MicroStrategy, the launch of spot ETFs, Trump’s political support—all once seen as super bullish “adoption announcements”—now seem unable to sustain price gains.

Asset performance comparison since the 2024 November election

Silver: +205% (driven by industrial demand + risk aversion)

Gold: +83% (the king of safe-haven assets)

Nasdaq: +24% (tech rebound)

S&P 500: +17.6% (steady US stock growth)

Bitcoin: -2.6% (the only major asset to decline)

Balchunas counters: 300% in 20 months still not enough?

Bloomberg senior ETF analyst Eric Balchunas responded that Bitcoin is currently consolidating. Previously, Bitcoin’s price plunged below $16,000 during the crypto winter of 2022, and peaked at $126,000 in October. “That’s a 300% increase over the past 20 months,” Balchunas said. “What more do you want? An average annual increase of 200%, with no volatility?”

This counter looks at Bitcoin’s performance over a longer timeframe. From the $16,000 low in November 2022 to the $126,000 high in October 2024, Bitcoin achieved nearly an 8-fold increase in less than two years. Such performance is extremely rare among any asset class, far surpassing stocks, bonds, real estate, and traditional investments.

Balchunas’s logic is that investor expectations for Bitcoin may be overly unrealistic. No asset can sustain parabolic growth forever without corrections. The 30% retracement from $126,000 to $89,000 is not unusual historically. During the 2017 bull market, Bitcoin experienced multiple 30-40% pullbacks before reaching $20,000. The 2021 bull run was similar, retracing from $64,000 to $29,000 before rising again to $69,000.

Finally, Balchunas summarized that as of November 2024, Bitcoin has gained 122% year-to-date, far outperforming gold. He notes precious metals have been trying to catch up. The choice of time frame is critical: if measured up to November 2024, Bitcoin has significantly outperformed gold. But if starting from November 2024 to now, gold has outperformed Bitcoin. The difference in these time frames is at the core of the debate between the two experts.

Eric Balchunas’s rebuttal points

Long-term astonishing gains: 20 months from $16,000 to $126,000 (+300%)

Corrections are normal: 30% retracements are common in Bitcoin history

Silent IPO analogy: early holders cashing out is healthy wealth transfer

Time frame difference: Bitcoin up 122% YTD before November 2024, far surpassing gold

Silent IPO and early holder cash-out wave

Balchunas suggests Bitcoin’s poor performance is likely due to early investors cashing out after holding for years, calling this a “silent IPO” for Bitcoin. He continues with an example: one investor sold over $9 billion worth of Bitcoin in July after holding for more than a decade.

“Silent IPO” is a very clever metaphor. Traditional IPO is when a company’s stock is first publicly issued, allowing founders and early investors to cash out after a lock-up period. Bitcoin doesn’t have a traditional IPO, but as prices soared to highs, early holders (who bought in 2010-2013) began systematically selling, similar to IPO cash-outs. These early investors may have bought at $1-100, and selling at $100,000 means hundreds or thousands of times return.

A single $9 billion sell-off is extraordinary, possibly from miners or early investors from the Satoshi era. Such large sell orders would take months or even years to fully absorb. When multiple “whales” are waiting to cash out, any price rebound faces their selling pressure, creating a strong supply wall. This explains why positive news (ETFs, institutional adoption, political support) often fails to push prices higher.

This “silent IPO” phenomenon could have a long-term positive impact on Bitcoin. The concentration of early holdings shifts toward broader distribution, from a few “diamond hands” to institutions and new investors. This improved distribution could stabilize markets and aid price discovery over time. However, in the short term, this process inevitably causes price pressure and volatility.

Who is the true safe-haven asset?

The rally of gold approaching $5,000 rekindles the debate over whether Bitcoin is truly “digital gold.” Gold’s new highs driven by geopolitical tensions, inflation fears, and central bank buying demonstrate its status as the ultimate safe-haven asset. In contrast, Bitcoin’s weak performance in the same macro environment challenges its positioning as “digital gold.”

However, this comparison may be oversimplified. Gold has thousands of years of history as a safe haven, while Bitcoin is only 15 years old. Gold is held in large reserves by central banks, sovereign wealth funds, and pension funds, whereas institutional holdings of Bitcoin are just beginning. They are at very different stages of maturity, making direct comparison unfair.

Additionally, the price drivers for Bitcoin and gold are not identical. Gold is mainly driven by safe-haven demand, inflation expectations, and central bank purchases. Bitcoin is more influenced by technological adoption, regulation, and speculative sentiment. In some macro environments, they may move together (e.g., 2020-2021), but in others, they diverge (like now).

Bitcoin vs. gold: a comparison of safe-haven attributes

Historical validation: gold’s thousands of years, Bitcoin’s 15 years

Institutional holdings: gold held in reserves by central banks, Bitcoin just starting

Price drivers: gold driven by safe-haven + inflation, Bitcoin by adoption + regulation

Volatility: gold 10-20% annually, Bitcoin can reach 50-100%

Perhaps a more accurate statement is: gold is a proven safe-haven asset, while Bitcoin is an emerging asset with safe-haven potential. Bitcoin needs to go through more full economic cycles and geopolitical crises to truly prove its safe-haven qualities. Its current underperformance may just be growing pains.