Bitcoin Versus Gold: Flight Versus War

When it comes to bitcoin versus gold, gold is the senior market. Bitcoin is not digital gold, it has different use cases. However, there is a similarity between the two assets. While my bitcoin socks got a great reaction when I was walking around LEAP 2025 in Riyadh, they do not have the same impact as wearing a gold Vacheron Constantine watch, seeing a building coated in gold leaf or eating a steak coated in gold at Salt Bae’s restaurant in Dubai. Gold is embedded in our DNA through eons of natural selection, a fact still evident today in the bars and night clubs of Monaco.

Bitcoin is better suited as flight capital for the fleeing rich, and we can imagine plenty of villains bailing out of their dire situations with crypto rather than unwieldy and insufficient stacks of cash and gold. However, crypto is not a great store of wealth. Sorry, believers – Bitcoin is not secure. There is no such thing as a cold wallet, or at least not one at absolute zero. Fort Knox is more secure than Satoshi’s wallet. It is frustrating that hardly a day goes by without supposedly ‘secure’ crypto proving as vulnerable as a gold Rolex at 1 a.m. in a red-light district. This is one of several current crypto weaknesses which mean that bitcoin can never replace gold, or for that matter replace fiat currency.

But let’s forget all the bitcoin maxi versus old geezer gold vs bitcoin debate and let’s look at the current situation.

Bitcoin is in an equilibrium. That equilibrium has a lot of noise in it, as you would expect, but it is clear that for now it’s going nowhere. However, when it eventually moves, it will move significantly – either up or down:

That may sound obvious, but for a trader, it’s critical. A breakout will come, and traders will jump on board for the ride. Before a breakout – barring unexpected developments – the trading range typically compresses as the market makes up its mind. When volatility drops to a low level, you get the break out. This pattern has repeated in past Bitcoin rallies, and I’ve used it to predict breakouts. There will likely be a rerun of this pattern – unless an unforeseen event comes out of the blue to disrupt the trend.

To me the current setup is not bullish, it appears finely balanced. However, the bubble in crypto AI tokens, which boomed and died, is not a good omen for more crypto joy because historically that kind of froth signalled the end of the run. But it’s not the time to give up yet – the way to go is to watch and wait.

Gold, on the other hand, is an entirely different story:

The chart shows a classic boom chart pattern, complete with a ballistic curve.

At this moment, gold is surging, while Bitcoin remains range-bound and volatile.

Gold is for war while bitcoin is for flight. The former may of course come before the latter and they both could boom. But that’s just speculation. The key is to trade based on what you see, not what you think. And right now, the charts show that gold is the cool kid on the block, while crypto looks tired.

To me, there is no existential conflict between gold and crypto. They are both assets denominated in dollars, not the other way around. However, only gold looks like a strong one-way bet.

Remember, a chart reflects what has already happened, and where gold trades today is probably an early warning of the kick in the pants the U.S. delivered to Europe this week. If this U.S. stance is strategic – and after all it should be – then gold will run and run.

Gold is for war.