The Underlying Cause of Bitcoin's Current Underperformance Compared to Gold

Gold and silver continue to rise while Bitcoin trades sideways, a trend analysts attribute to geopolitical tension, policy uncertainty, and expectations for lower real interest rates. These conditions are traditionally favorable to precious metals, and investors are choosing them over Bitcoin amid the uncertainty. Silver has outperformed gold at times, due to tighter supply and stronger speculation. Bitcoin, on the other hand, is behaving more like a high-volatility risk asset than a defensive store of value. On-chain data reveals that Bitcoin's demand is turning negative, as fresh buying interest fails to match supply. Bitcoin's stagnant performance follows a tough end to the year, with the cryptocurrency heading for its weakest fourth quarter since 2018. However, some analysts believe that the consolidation is not entirely negative, as Bitcoin ETF flows still provide underlying support.