Gold’s Downfall? Bitcoin’s Secret Power Revealed!

by

Markets

What to know:

  • Gold is nearing a technical bear market despite geopolitical tensions, as higher interest rate expectations and inflation pressures from rising oil prices reduce its appeal. (Spoiler: It’s not a “safe haven” anymore. Just a fancy paperweight.)
  • On an M2 adjusted basis, gold is near historical peak levels, while bitcoin remains in a typical consolidation phase that has historically preceded new cycle highs. (Because nothing says “I’m a genius” like waiting for crypto to get back to 2021 levels.)

Gold is approaching a technical bear market, down nearly 20% from its January all time high. Traditionally viewed as a store of value and hedge against geopolitical uncertainty, gold’s recent performance challenges that narrative. Despite escalating tensions in the Middle East, prices have fallen around 10%, since the war started at the end of February. (Because nothing says “I’m a reliable investment” like ignoring actual crises.)

Markets have also repriced the interest rate outlook, with cuts now largely pushed out and policy expected to remain restrictive through December 2026. At the same time, rising oil prices, driven by geopolitical risk, are adding upward pressure on inflation, reinforcing the higher for longer rate environment, a key headwind for gold. (Because who needs a vacation when you can just pay more for gas?)

While adjusting for M2 money supply, which includes cash, deposits, and other liquid forms of money, gold is trading near levels seen at major historical peaks in 1974 and 2011, when it was $200 and $1,800 per ounce, respectively. On this basis, gold appears to be consolidating at elevated levels, potentially forming a cyclical floor relative to global liquidity. (Because nothing says “stability” like pretending you’re 1974 but with better Wi-Fi.)

In contrast, bitcoin relative to M2 remains in a consolidation phase similar to 2024, while retesting its 2021 highs on a liquidity adjusted basis. Historically, each cycle has seen bitcoin move above prior peaks when adjusted for money supply. With bitcoin still about 40% below its October high, this may represent a typical consolidation range before further upside. (Because nothing says “trust me” like “we’re just getting started.”)

Gold has traded alongside bitcoin tick for tick since it broke down from $5,000 on Wednesday, showing elements of positive correlation after diverging from the crypto markets prior. (Because nothing says “chaos” like gold and crypto finally agreeing on something.)

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2026-03-22 18:01