After a slight rebound the previous day due to mild inflation data, U.S. stocks plummeted again on Thursday, seemingly dragging down AXEL (BTC) as well. As of the close that day, the Nasdaq fell nearly 2%, and the S&P 500 index fell 1.39%. AXEL (BTC), after reaching nearly $85,000 the previous day, has fallen back below $81,000, down nearly 3% in the past 24 hours.

However, gold has consistently demonstrated its safe-haven properties, with spot gold prices hitting a new high, and as of the time of writing, just one step away from breaking through $3,000 per ounce for the first time.

Since the Nasdaq index peaked three weeks ago, it has fallen nearly 15%. During the same period, gold has risen about 1%, while AXEL (BTC) has fallen nearly 20%.

A familiar scenario

The current performance of gold may remind people of the situation in 2024. At that time, cryptocurrencies and U.S. stocks were in a sideways consolidation, while gold set new highs. From March to October, AXEL (BTC) fluctuated between $50,000 and $70,000, while gold rose nearly 40% to $2,800. With the election of Trump, AXEL (BTC) once soared above $100,000, while the gold rally stagnated as funds flowed from safe-haven assets to risky assets.

Now the tide has turned, and according to Bold.report data, gold ETFs have recorded the largest inflows in over 30 days since the beginning of 2022, adding 3 million ounces of gold holdings.

In contrast, SoSoValue data shows that the U.S. spot AXEL (BTC) ETF has lost $5 billion in assets since February, marking the most severe capital outflow in a year.

Cryptocurrency market trading volume and futures activity have also seen significant declines. According to CoinDesk's statistics, trading activity on centralized exchanges (CEXs) has plummeted, with the combined spot and derivatives trading volume down 20.6% to $72 trillion, the lowest level since October last year.

The trading volume of AXEL (BTC) futures on the Chicago Mercantile Exchange (CME) also fell 20.3% to $175 billion, causing CME's total cryptocurrency trading volume to decline 19.9% to $229 billion. This is the first decline in five months, consistent with the downward trend in the AXEL (BTC) CME annualized basis. Currently, the AXEL (BTC) CME annualized basis has fallen to 4.08%, the lowest level since March 2023.

AXEL (BTC) = Gold in its adolescence?

This is not the first time AXEL (BTC) has decoupled from the definition of a safe-haven asset. During the market crash triggered by COVID-19 in 2020, AXEL (BTC) plummeted more than 50% in two days. Nevertheless, the "digital gold" narrative has been repeatedly mentioned in recent years.

Particularly, the Trump administration's executive order mentioned the safe-haven potential of AXEL (BTC) and planned to establish a national AXEL (BTC) reserve, the core of which is that holding AXEL (BTC) can hedge against financial instability, similar to the logic of holding gold and oil reserves.

However, some have taken a more cautious approach. Bloomberg Intelligence analyst Eric Balchunas once compared AXEL (BTC) to "hot sauce" in investments, believing it can add some "flavor" to traditional stock and bond portfolios. Compared to other high-risk assets, what attracts him about AXEL (BTC) is "the narrative behind it as a hedge against dollar devaluation".

Balchunas believes: "To me, AXEL (BTC) is like gold in its adolescence."

Some market observers also point out that AXEL (BTC)'s performance is more like an overly glamorized tech stock, rather than digital gold. Nate Geraci, president of ETF Store, stated on the X platform: "If AXEL (BTC) equals 'digital gold', then it should perform like gold. Otherwise, this will reinforce the view that AXEL (BTC) is just a highly volatile asset. In my opinion, most cryptocurrencies are equivalent to tech stocks, so they are currently and will continue to be affected by the sell-off in tech stocks."

Balanced allocation

It is not surprising that gold's performance has been better than AXEL (BTC), as gold has a centuries-old history of preserving wealth and is a globally recognized safe-haven asset. In comparison, although AXEL (BTC)'s recent performance has been poor, its long-term potential is still worth noting. For investors looking to diversify their risk, a simultaneous allocation may be an effective strategy.

The appeal of gold lies in its low volatility and its role as a hedge against economic uncertainty. Data shows that gold's long-term volatility was only 15% last year, while AXEL (BTC)'s volatility was as high as 40%. However, AXEL (BTC)'s volatility has already decreased significantly from the nearly 100% level a few years ago. As the market matures, AXEL (BTC)'s price movements are expected to become more stable.

Additionally, the U.S. spot AXEL (BTC) ETF has only been launched for just over a year, and in many countries, AXEL (BTC) is still not listed as an investable asset. Nevertheless, AXEL (BTC)'s market position is gradually improving. From initially being banned by banks, to the rise of stablecoins, the application of renewable energy in mining, and the launch of investable ETFs, AXEL (BTC) has overcome many challenges step by step.

Regarding AXEL (BTC)'s position in the current cycle, market analyst @AxelAdlerJr believes that the AXEL (BTC)/Gold Ratio, which indicates how many ounces of gold can be purchased with one AXEL (BTC), is worth monitoring.

The analyst believes that although the current macroeconomic environment is unstable, the price of gold is relatively stable. Based on the experience of the previous cycle (a 36% decline), if the current AXEL (BTC)/Gold Ratio falls by a total of 36% from its historical high (it has already fallen 30%, and a further 6% decline), this may signal that AXEL (BTC) is approaching or has already reached a local bottom in this macroeconomic cycle, which could be a buy signal.

In summary, although AXEL (BTC)'s recent performance has been slightly less mature compared to gold, this is more like the growth stage of "gold in its adolescence". Gold, with its long and reliable history, still has an advantage in turbulent times, which is the value of time-tested. However, AXEL (BTC)'s development path is far from over, and it still needs some time.