Bitcoin vs. Gold: The Best Buy Right Now, According to a Wall Street Analyst

The investment theses for gold and Bitcoin (CRYPTO: BTC) are similar. Both are considered safe-haven assets, at least by some investors, because they exist in finite quantifies. That means gold and Bitcoin become more valuable as demand increases, which theoretically makes them good hedges against weakness in the U.S. dollar and other fiat currencies.

Case in point: The U.S. Dollar Index has fallen 8% year to date amid concerns about the Trump administration's trade and fiscal policies. Put differently, the value of U.S. currency has decreased 8% versus a basket of foreign currencies. Meanwhile, gold and Bitcoin prices have surged 24% and 18%, respectively.

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Importantly, while gold outperformed in the first five months of the year, JPMorgan Chase analyst Nikolaos Panigirtzoglou expects the opposite outcome in the remaining months of 2025. Read on to learn more.

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Exchange-traded funds (ETFs) make it easy for investors to get exposure to gold and Bitcoin

Before discussing the pros and cons of gold and Bitcoin, investors should know how to get exposure to both assets. Gold bullion can be purchased through various online retailers, and Bitcoin can be purchased through cryptocurrency exchanges like Coinbase. But direct ownership comes with challenges.

For instance, transporting and storing gold tends to be difficult and costly, and selling physical bullion can be complicated. Likewise, Bitcoin transactions on cryptocurrency exchanges often involve high fees, and storage solutions can be a headache. Fortunately, exchange-traded funds (ETFs) eliminate those problems.

The SPDR Gold Shares (NYSEMKT: GLD) tracks the spot price of gold. It's the largest gold fund as measured by assets under management, and the most popular in terms of trading volume. It has a somewhat high expense ratio of 0.4%, meaning shareholders will pay $40 annually on every $10,000 invested in the fund.

The iShares Bitcoin Trust (NASDAQ: IBIT) tracks the spot price of Bitcoin. It is the largest spot Bitcoin ETF as measured by assets under management, and the most popular in terms of trading volume. Compared to similar funds, the iShares Bitcoin Trust has a middle-of-the-road expense ratio of 0.25%.

Gold and Bitcoin can be hedges against down stock markets and the devaluation of the U.S. dollar

JPMorgan analysts in a recent note to clients highlighted cryptocurrency-specific catalysts that could lead to Bitcoin outperforming gold in the remaining months of the year. First, several companies have put Bitcoin on their balance sheets, and many plan to add more. The best known of the bunch is Strategy, formerly known as MicroStrategy, which plans to invest $57 billion in Bitcoin through 2027.

Second, two states -- Arizona and New Hampshire -- recently enacted laws that establish strategic Bitcoin reserves, and about two dozen others have introduce similar legislation. That positions state governments as potential buyers of Bitcoin. JPMorgan analysts wrote, "As the list grows, with other U.S. states potentially considering adding Bitcoin to their strategic reserves, this could turn into a more sustained positive catalyst for Bitcoin."

However, JPMorgan views gold as the more prudent option for risk-averse investors. "In our view, gold may be positioned to offer some protection against further geopolitical risk and dollar weakness," analysts wrote in their mid-year outlook. "We are skeptical that Bitcoin and other crypto assets offer the potential to improve portfolio resilience. Despite their low correlations to traditional assets, crypto assets have historically made portfolios more fragile."

Here is the bottom line: Tariffs imposed by the Trump administration are expected to raise prices and slow economic growth. Also, the tax and spending bill that recently passed the House of Representatives would add an estimated $3 trillion to federal debt during the next decade. Those developments have left some investors hesitant about owning U.S. stocks and bonds. So, demand for U.S. currency has declined, causing the dollar to lose value.

That trend may or may not intensify in the coming months. But investors concerned about the possibility can hedge against down stock markets and the devaluation of the U.S. dollar by owning gold or Bitcoin. Personally, I think gold is the better option for anyone that cannot tolerate volatility. But I also think Bitcoin can outperform gold (especially in the long run) as more companies and governments adopt the cryptocurrency as a reserve asset.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and JPMorgan Chase. The Motley Fool has a disclosure policy.