Bitcoin is showing signs of diverging from its risk-asset identity, behaving more like a hard asset in economic environments where gold typically underperforms, as per analysts at Citi Research.
In a recent report, Citi analysts said Bitcoin has outperformed during periods of rising interest rates and term premiums, conditions that tend to weigh on gold.
Historically, gold performs best when both term premiums and yields are falling, reducing the opportunity cost of holding the non-yielding asset.
But Bitcoin’s strongest returns have come during the opposite setup, where real rates are climbing and inflation concerns are elevated.
The findings suggest Bitcoin may behave more like commodities such as energy or base metals, which tend to rise during periods of economic overheating.
The asset’s finite supply and growing investor interest during macro stress periods have contributed to this pattern.
Citi said Bitcoin typically trades in line with equities during market downturns, but recent episodes, such as the Silicon Valley Bank collapse and the bond market turmoil in late 2023, stand out.
In those cases, Bitcoin posted gains even as broader risk assets struggled. This behavior has prompted a closer look at its macro sensitivity.
Gold has tended to respond predictably to real yields. When rates fall, gold benefits as a store of value.
When they rise, it lags. Bitcoin, on the other hand, has outperformed its unconditional return profile when both term premiums and yields rise, a pattern not seen in safe-haven assets.
Citi’s historical analysis shows Bitcoin also performed well in rare environments of falling yields and rising term premiums, which are typically favorable for gold.
These results suggest Bitcoin is not a consistent hedge, but in some cases, investors may be treating it as a limited-supply asset during periods of monetary tightening.
Citi analysts stop short of labeling Bitcoin a safe haven, citing its limited track record and price swings. Still, its strength in environments that typically hurt gold suggests an evolving role in investor portfolios
