Bitcoin Outperforms Gold as Inflation Hedge in Market Shift

• Bitcoin outperformed inflation 97% of the time since 2009, while gold did so only 56%.
• Bitcoin gained up to 10% as gold fell 19% during the conflict, showing a clear market divergence.
• Rising yields and liquidity needs drove gold selling, while Bitcoin absorbed ETF inflows.

Bitcoin’s positioning as an inflation hedge has come into focus following statements from Bitmine CEO Tom Lee. Speaking at the Futu Investment Exhibition, Lee stated that Bitcoin has outperformed inflation by 97% of the time since its creation, while gold has done so only 56% of the time over the same period. 

Lee added that Bitcoin has underperformed inflation in just 3% of observed periods since 2009, strengthening its consistency relative to traditional assets. He also pointed to long-term data on gold, noting that over the past 55 years, gold has underperformed inflation in 48% of three-year return periods. The comparison shows differences in performance reliability between the two assets under inflationary conditions.

In the same remarks, he stated that Ethereum is gaining relevance in institutional finance, particularly in tokenization and artificial intelligence-linked applications tied to Wall Street infrastructure.

Bitcoin and Gold Divergence in Recent Market Conditions

Market data during recent geopolitical developments shows a divergence between Bitcoin and gold. Since February 28, Bitcoin has gained between 7% and 10%, while gold declined by 19%, according to analyst Shanaka Anslem Perera. Gold prices fell from approximately $5,500 before the conflict to $4,098 on March 23, before recovering to $4,377 by March 27.

Gold exchange-traded funds recorded $7.9 billion in outflows, equivalent to 54.8 tonnes, based on figures from the World Gold Council and JPMorgan. In contrast, Bitcoin recorded net ETF inflows of more than $1.1 billion in the first two weeks of the conflict.

Liquidity Conditions and Structural Market Access

The divergence has been linked to liquidity conditions and market access rather than a direct replacement of gold. A 40% increase in Brent crude prices to $108 contributed to inflationary pressures, pushing the U.S. 10-year yield to 4.415%. Rising yields increased the opportunity cost of holding non-yielding assets such as gold, prompting institutional selling.

Bitcoin’s continuous 24/7 trading structure and ETF infrastructure enabled capital to enter markets outside traditional trading hours. This provided an alternative liquidity channel during periods when conventional financial systems were less accessible.

At the same time, infrastructure disruptions have added pressure across markets. Iranian strikes on Qatar’s Ras Laffan facility on March 18 disrupted helium production, which accounts for roughly one-third of global supply. QatarEnergy declared force majeure, with repairs expected to take three to five years.

Related: Bitcoin Is Beating Gold During War, Peter Schiff Pushes Back