Bitcoin (BTC) vs Gold (XAU): Which is More Profitable During Economic Crisis?

 Key Insights: BTC vs. XAU

• Bitcoin (BTC) and Gold (XAU) prices have been on a tear in recent weeks as events surrounding the escalating Middle East crisis brought their safe haven credentials to the fore. 
• Despite having separate underlying markers, both BTC and XAU have often performed positively during periods of economic crisis.
• While Gold has dominated the commodities markets in recent weeks, Bitcoin Dominance (BTC.D) is also now approaching the 53% range for the first time since 2021, the Middle-East crisis could drive both further upward.

While Gold (XAU) has dominated the commodities markets in recent weeks Bitcoin’s market share of the crypto industry valuation (BTC.D) is also approaching a 2-year peak.

As the Middle East crisis rages on, historical data analysis explores how Gold (XAU) and Bitcoin (BTC) have performed in previous periods of economic turmoil.

Gold (XAU) vs.  Bitcoin (BTC) Historical Performance: Covid-19 and Russia vs. Ukraine War

The Covid-19 virus broke out in early-2020, sending risk-on assets including global stocks, commodities and crypto markets into an instant tail spin. Gold and Bitcoin were not left of the initial market crash. However, weeks down the line, both assets bucked the global trends displayed positive performances.

During the Covid-19 breakout, the historical price charts shows that BTC dropped by 64% while Gold only dropped by 11%. In this instance, Gold showed more resilience than BTC, with XAU investors taking 53% less losses.

Similarly, between February and May 2022, Bitcoin price declined 28% as the Russia vs Ukraine war broke out. Comparatively Gold only took a hit of 9%, beating BTC at the resilience game again.

However in terms of recovery, the historical data shows that BTC holders emerged the biggest winners in both cases of global economic turmoil. 

As depicted above, as markets began to recover from the Covid-19 losses Bitcoin made a blistering 204% rebound between March 2020 and August 2020. During that period, Gold could only muster a 36% price recovery. 

When the markets rebounded from the destablising impact Russia vs Ukraine war, BTC again scored 93% gains, while Gold only went up by 23%.

Projected Performance for BTC vs. XAU Amid Middle East Crisis

More recently, geo political crisis broke between Israel and Palestine around October 7, 2023. And similar to Covid-19 and Russian vs. Ukraine war data trends, both Gold and Bitcoin have made substantial gains, setting the crypto and commodities marekts’ recovery in motion.

As depicted in the chart below,  betweent October 7 and October 24, Bitcoin price has scored 27% gains moving from $27,200 to a yearly peak of $34,500.  While Gold gains are approaching only just approaching the 10% mark. 

In summary, historical price data analysis, leads to two vivid conclusions. Firstly, whenever an economic crisis breaks out, Gold (XAU) is a more resillient safe-haven asset than BTC. But more importantly Bitcoin is more likely to deliver superior profits when the markets stabilize. 

Hence, depending on the trading strategy, more risk averse investors could opt for Gold’s to avoid adverse price swing in the short term. But conversely investors with higher risk appetite will likely opt for BTC. 

Going by the historical price data, BTC price rally will likely deliver larger gains during ongoing market rally. Considering that BTC has surpass the 50% price recovery mark following periods of recent economic turmoil, Bitcoin price will likely break above $45,000.

Meanwhile investor can expect Gold (XAU) to score more modest gains of approximately 20% by hitting $2200 range.