What's sending the gold and Bitcoin price to new record highs?

Investors are sending Bitcoin and gold surging to new record highs. But why?

| More on:
A rich buisnessman buys luxury items with Bitcoin

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Both Bitcoin and gold prices have reached new record highs.
  • Economic uncertainties and expansive monetary policies have led investors to seek alternative stores of value, diminishing confidence in traditional currencies.
  • Institutional acceptance, rise of crypto ETFs, and geopolitical uncertainties are boosting Bitcoin's valuation, while falling interest rates and global instability are reinforcing gold's appeal.

The Bitcoin (CRYPTO: BTC) price and the gold price have at least one thing in common.

Both have been racing to new record highs.

Earlier today, the gold price once more broke into new all-time high territory. Spot gold was trading for US$3,998.75 per ounce, just a whisker away from the psychologically important US$4,000 mark. This sees the gold price up 53.3% since this time last year.

The Bitcoin price has enjoyed even stronger gains.

The world's biggest crypto notched its own record high yesterday, with the token trading for US$126,198.07, according to data from CoinMarketCap.

Bitcoin has retraced 3.6% since that fresh highwater mark, currently trading for US$121,410.06. Still, that sees the token up 94.4% since this time last year. And it gives Bitcoin a market valuation of US$2.4 trillion.

Commenting on the surging gold and Bitcoin prices, Josh Gilbert, market analyst at eToro, said, "Ultimately, investors are re-evaluating what money and value mean in a world of persistent fiscal strain and policy uncertainty."

Gilbert continued:

Central banks keep running expansive monetary policies, and global money supply keeps rising. The record highs in both gold and Bitcoin are a clear message that confidence in traditional currencies is fading, and investors are increasingly turning to alternative stores of value.

What's driving the Bitcoin price to new records?

The rise of crypto exchange-traded funds (ETFs) and institutional adoption are among the factors helping send the Bitcoin price to new highs.

"For Bitcoin, the break to new records comes after continued institutional accumulation, with over US$3.2 billion flowing through bitcoin ETFs in the last week," Gilbert said.

"What's changing is how investors view the asset. It's evolving from a volatile, speculative trade within diversified portfolios," he added.

Gilbert concluded:

Its performance in the last three years, alongside continued record highs this year, cements Bitcoin's position as a core component of the modern investment landscape. To be clear, this is still a risk asset, and the asset remains in its infancy, but each day, it continues to mature into an asset investors want to allocate towards.

How about the soaring gold price?

The Bitcoin price may have outpaced the gains set by the gold price, but that's not the case for many ASX gold stocks, which are leveraged to the price of the yellow metal.

While the gold price is up 53.3% in 12 months, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) has rocketed 92.0%, with a number of prominent ASX gold stocks gaining far more.

Shares in ASX 200 gold stock Regis Resources Ltd (ASX: RRL), as just one example, are up 210.8% since this time last year.

Atop getting support from falling interest rates in most major economies, the gold price has charged higher amid the ongoing uncertainties driven by the shutdown of the United States government. And in recent days, France has thrown its hat into the ring, driving geopolitical uncertainty following the resignation of Prime Minister Sebastien Lecornu.

These events have also likely helped drive gains in the Bitcoin price.

Commenting on the fast-rising gold price, Ken Griffin, founder of hedge fund Citadel, said (quoted by The Australian Financial Review):

We're seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarise or de-risk their portfolios, vis-à-vis US sovereign risk.

You see sovereigns around the world, the central banks around the world, as you see individual investors around the world go, you know what, I now view gold as a safe harbour asset in a way that the dollar used to be viewed. That's what's really concerning to me.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cryptocurrencies

A man lays his head down on his arms at his desk in front of an array of computer screens and a laptop computer.
Cryptocurrencies

Bitcoin price slide sends world's top crypto into bear market

The Bitcoin price tumbled 21% from October’s all-time highs.

Read more »

Gold Bitcoin coin in the outback.
Cryptocurrencies

Bitcoin and gold surge to record highs as investors pile into the debasement trade

A weakening dollar and record bitcoin price have investors chasing hard assets in 2025’s defining market trend.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
ETFs

$10,000 invested in CRYP ETF 3 years ago is now worth…

This ASX ETF has delivered mega gains for investors with a high risk tolerance.

Read more »

a pile of bitcoins with a bitcoin resting against it stands in front of an Australian flag.
Cryptocurrencies

Is it better to buy Bitcoin directly, or use Bitcoin ETFs?

Owning Bitcoin has never been easier on the ASX.

Read more »

Gold Bitcoins lying on a global finance currency chart with arrows shooting higher.
Cryptocurrencies

Bitcoin price jumps 3% on fresh hopes for retirement account access

Bitcoin just made another sharp move higher. Here’s what triggered the spike, and what it could mean for crypto adoption…

Read more »

A man clenches his fists with glee having seen the share price go up on the computer screen in front of him.
Cryptocurrencies

Guess which fast-rising altcoin is leaving the Bitcoin price gains in the dust

Donald Trump’s return to the White House hasn’t just boosted the Bitcoin price.

Read more »

A businessman rips open his shirt superman style to reveal a Bitcoin logo.
Cryptocurrencies

After 'Crypto Week' in the US, could Bitcoin surge higher?

Crypto Week in the US just gave digital assets a serious boost. What happens next?

Read more »

Bitcoin concept image.
Cryptocurrencies

Bitcoin price rallies back above US$120,000 amid US stablecoin legislation

The US government’s cryptocurrency legislation is driving investor interest in Bitcoin.

Read more »