Why Bitcoin is lagging behind amid the global bonanza: Expert analysis on the money supply and the changing narrative

As global markets experience an unprecedented rally, Bitcoin faces an uncomfortable dilemma: its performance does not keep pace with traditional inflation-hedging assets. With a current price of $84.39K and a cumulative drop of -16.55% in the last year, what was considered “digital gold” has significantly lagged behind physical gold, which has gained more than 80% in the same period of high inflation, geopolitical tensions, and uncertainty about interest rates.

This mismatch has raised critical questions in the investment community: what is really behind this underperformance? Is this a structural failure of Bitcoin or simply a market timing problem? Several digital asset experts offer alternative perspectives on how to understand this gap and what signs it suggests for the near future.

The Inflation Hedge Puzzle: Why Gold Wins the Battle

In theory, during periods of expansionary monetary printing, store-of-value assets should capture the bulk of defensive capital flows. However, the gap between gold’s performance and Bitcoin suggests something more complex: institutions are gravitating toward the familiar in times of uncertainty.

According to industry analysis, gold’s current strength reflects what some call investor “muscle memory.” In times of extreme volatility, market participants tend to take refuge in assets with a well-known multi-century track record. Bitcoin, despite its protocolary technical stability for more than 15 years, is still perceived as a risk asset correlated with tech stocks, not as a genuine substitute for gold. This perception remains even when Bitcoin’s technical fundamentals are robust.

Silent Transfer of Ownership: The Money Supply Pressure No One Mentions

Beyond simple narratives, there is a market phenomenon that partly explains price stagnation: a massive transfer of ownership from early adopters to new institutions and investors.

Inflows into Bitcoin ETFs have been substantial in the recent period, but these capitals are not driving prices higher as would be expected. Instead, they are being absorbed by the supply that early adopters are deploying in the market. This is a distribution event, not a collapse in fundamental demand. Traditional money supply pressure (M2, M3) is forcing assets to compete for attention, and Bitcoin is losing that competition against gold due to psychological rather than technical factors.

Correlation failure or simple bad synchronization?

Today’s macroeconomic problems are rooted in the real world: persistent inflation, geopolitical conflicts, and decisions on interest rate policy. Bitcoin, contrary to what its narrative suggests, behaves like an internet asset that fluctuates with tech stocks, with which it has historically maintained a close correlation.

Gold represents the cover for crises in the physical world. Bitcoin does it for the digital world. But as long as real-world problems persist and uncertainty about the global money supply continues to compress risk, it stands to reason that defensive capital should be geared toward precious metals first. Followers of both categories use almost identical narratives (scarcity, money printing, chaos), but the market is clearly distinguishing between them.

The delayed rotation argument: when is it Bitcoin’s turn?

Despite the current disappointing performance, several experts maintain that a capital rotation into Bitcoin is inevitable, but it requires a key precondition: the saturation of traditional assets at obscene valuations.

Peter Lane, CEO of Jacobi Asset Management, notes that there is a “long-term, massive-scale comfort with precious metals that Bitcoin simply hasn’t gained yet.” However, he believes that when traditional hard assets reach levels of extreme overvaluation, capital will rotate into options with more attractive valuations.

Bitwise’s Andre Dragosch adds another relevant technical indicator: Mayer’s relative multiple between Bitcoin and gold is at “FTX crash” levels not seen since 2022. This suggests, under certain models, that Bitcoin could be massively undervalued relative to both the projected global money supply for 2026 and the prevailing macroeconomic environment. If this analysis is correct, the upward correction could be resolved in the coming months.

Shifting the Engine: From Inflation Hedge to Digital Infrastructure

Anthony Pompliano, CEO of ProCap Financial, introduces an important nuance: Bitcoin was primarily an inflation hedge for the past half-decade, but if the economy turns towards deflation, the asset needs to find a “new demand engine” to continue driving gains.

This argument suggests that future demand for Bitcoin will not depend on traditional money printing, but on its usefulness as internet-native financial infrastructure. It is a profound change of narrative: from macro-sensitive speculative asset, to store-of-value infrastructure.

David Parkinson, CEO of Musquet, is more blunt: the argument that “digital gold has failed” is premature noise. Bitcoin’s fixed supply and the growth of its network are generating outperformances against inflation over multi-year horizons. Bitcoin is emerging as the internet’s native monetary asset, not just a temporary hedge. It is a permanent solution to inflation, a thesis that defies the logic of the current macroeconomic cycle but aligns with the protocol’s scheduled shortage.

Real-time market behavior: XRP’s fall as a symptom

The broader market movements confirm the fragility of the current sentiment towards digital assets. XRP, for example, fell by approximately 5.67% in 24 hours (from levels close to $1.91 to $1.81), in line with corrections in high-beta assets when Bitcoin loses key support.

The decline accelerated as XRP broke the crucial support around $1.87 with elevated volume, erasing accumulated gains. Traders are now monitoring $1.80 as the critical containment level, with $1.87–$1.90 as the recovery confirmation target. This behavior reflects the market’s sensitivity to risk-safety cycles, where high-volatility tokens are first sold when confidence weakens.

Outlook: the global money supply factor in the 2026 horizon

The underlying question is whether the global money supply will continue to expand at a rapid pace in 2026, which could favor Bitcoin as a real hedge, or whether central banks will implement restraint. Experts are divided, but most agree that the re-evaluation of Bitcoin as a reserve asset will be the real test.

What does seem clear is that Bitcoin is not failing due to a fundamental lack of utility or demand. You’re facing a sequencing problem: In a world where the money supply breeds volatility and fear, investors will gravitate to the known first. When that certainty runs out—and when traditional assets reach valuation extremes—capital will likely seek new frontiers. Bitcoin might be waiting on the line, but for now, the market is still dancing with gold.