Donald Trump’s focus on Bitcoin could threaten gold’s future

While gold is under pressure, Bitcoin has rallied since the US presidential election as the industry expects a strong shift towards crypto assets.

The leading investment asset, which is also used as a primary inflation hedge, fell to a one-month low of $2,543 on Nov. 14, less than a day after the U.S. Consumer Price Index report emerged — with the U.S. inflation rate at an expected 2.6% In October.

Gold price | Source: Trading Outlook

Despite its recent rise to $2,623, gold is still down 2.6% in the last 30 days.

On the other hand, digital gold Bitcoin (BTC) rose to an all-time high of over $93,400 just hours after the US CPI data was released.

In addition to Bitcoin, limiting interest rate cuts could also make U.S. Treasury yields look more attractive than gold.

Maruf Yusupov, co-founder of gold-backed stablecoin Deenar, expects a strong shift in gold’s attractiveness with Donald Trump’s strong focus on taxes, tariffs and crypto.

“Despite its centuries-old importance, focusing on Bitcoin could counter gold’s dominance as a hedge against advancing inflation. This means investors can shift their funds from gold to Bitcoin, leading to a rapid rise for Bitcoin.”

Yusupov told crypto.news:

Deenar’s co-founder added that the Federal Reserve’s hawkish stance (raising interest rates) could “get economic metrics back on track.” But this will also negatively affect the “attractiveness of gold”.

“Investors who want to diversify their capital can instead choose Bitcoin, which is known for its relatively higher returns.”

Yusupov says.

Yusupov believes that the strengthening of the US dollar could threaten gold in the long term because “the need to adopt gold or other hedges becomes unnecessary in general.”

Republican U.S. Senator Cynthia Lummis on November 17 proposed selling some of the Fed’s gold to accumulate Bitcoin as a national reserve. According to Gold.org data, the USA has 8,133 tons of gold reserves as of the second quarter of 2024.