As gold surges, did Bitcoin really fail?

In early 2026, one question has emerged among investors. While gold has risen by more than 80% over the past year, Bitcoin (BTC) has recorded a year-on-year decline of over 16%. Is Bitcoin able to play its role as an inflation hedge and safe-haven asset? Industry bulls argue that this “relative weakness with gold” is not a fundamental failure of Bitcoin, but a temporary market phenomenon.

Why Gold is Bought and Bitcoin Is Sold

Amidst persistent high inflation, geopolitical tensions, and interest rate uncertainty, gold, a traditional precious metal, is the preferred choice for investors. In theory, assets that protect against inflation should retain their value when the currency value falls. In fact, gold and other precious metals have proven this theory.

However, Bitcoin, which was expected to be “digital gold,” has not lived up to this expectation. Many observers are asking, “Why buy Bitcoin now?” While gold and technology stocks appear to be delivering better returns, faith in Bitcoin has wavered.

Three blind spots pointed out by Bitcoin proponents

Industry experts point out that there are structural factors that the market has overlooked. First, this is not a loss of demand, but only a transfer of ownership. The amount of money that institutional investors are pouring into through ETFs is enormous, but it is only absorbing a decade’s supply from early adopters and is not directly linked to price increases.

Second, there is also a view that Bitcoin has not actually “failed” against gold. Rather, it is a historical fact that Bitcoin has had a strong correlation with internet-related assets since its inception, just linked to the decline in technology stocks as a whole.

Third, there is an analysis that the current rise of gold is only a temporary “muscle memory”. In times of uncertainty, investors tend to retreat to familiar assets. Gold functions as such a traditional and easy-to-understand asset.

The Digital World’s Reserve Asset, Gold Is That of the Real World

The common understanding among industry analysts is that gold and Bitcoin are not competitors, but assets from different ecosystems. Gold is a real-world reserve asset, while Bitcoin is that of the digital world. Today’s market challenges are real-world, so there is a phase where gold temporarily maintains its dominance.

However, what is noteworthy in 2026 is the possibility of a “delayed rotation”. If traditional real assets inflate to excessively high levels and the relative undervaluation shifts to Bitcoin, capital inflows may accelerate.

The Current Bitcoin Market Structure

The latest on-chain data shows an interesting composition. The current BTC price is hovering around $84,510, with about 63% of investors having an average acquisition cost higher than the current price. While supply is concentrated between $85,000 and $90,000, the support level below $80,000 is thin.

This situation suggests a persistent upside expectation among market participants. At the same time, looking at the relative value indicators of gold and Bitcoin (Meier multiple), Bitcoin has already reached an undervalued level equivalent to that of the FTX collapse in 2022, and there may be room for further upside given the macro environment in 2026.

Is the “Golden Age” Permanent or Temporary

Some experts see the digital gold narrative itself as a failure. It is reasonable to point out that Bitcoin does not function as a true inflation hedge or safe-haven asset during times of geopolitical risk and financial uncertainty.

However, from another perspective, Bitcoin should be positioned as a “permanent solution” rather than a “temporary hedge” against inflation. The fixed supply and continuous growth of the network have delivered returns that exceed even gold over a multi-year period.

The current phase of the market buying gold and selling Bitcoin may be an anomaly even from a historical point of view. Faith in digital assets is being tested as “habituation” to gold remains prevalent among institutional and retail investors. However, whether 2026 will be a turning point will depend on changes in the macro environment and capital allocation decisions.