Gold up, Bitcoin down. What investors should do next?

Both serve different purposes — protection or growth — so price movements may not matter as much as clarity of intent.

Markets are once again sending mixed signals — gold prices are climbing, while Bitcoin has retreated from recent highs.

The divergence is not just about asset performance — it reflects how investors are reallocating capital in an environment shaped by uncertainty, cautious sentiment and shifting risk preferences.

Gold has benefited from renewed safe-haven demand as investors brace for slower global growth, persistent geopolitical risks and an uneven outlook for interest rates.

Over the past 12 months, gold prices have risen by approximately 70%, a move that is well above historical norms (strongest annual performance since 1979) for an asset typically associated with steady, defensive returns.

The pace and scale of this rally have caught out even experienced investors, many of whom did not expect such a strong performance from what is usually a low-volatility store of value.

This global strength has translated into local prices rising above RM580 per gram. While gold has long been valued for stability rather than growth, the recent surge reflects an unusual confluence of macro uncertainty, geopolitical tension and capital rotation into perceived safe assets.

In contrast, Bitcoin has pulled back. Trading at around US$88,000 (RM358,000) currently, after it hit an all-time high of US$125,686 (RM509,531) on Oct 5, 2025, its decline has unsettled some investors and reignited debate about crypto’s role in portfolios.

The latest move reinforces a familiar pattern: in risk-off environments, Bitcoin still behaves like a volatile growth asset rather than a defensive one.

This divergence is particularly evident across Asia. For decades, property absorbed surplus household wealth, especially among Chinese investors.

While China’s property market is under strain, that capital has not disappeared — it has rotated. Gold, being liquid, tangible and universally recognised, has emerged as a preferred alternative.

Retail demand for physical bullion has strengthened globally, including in major consumer markets such as the US.

Malaysia mirrors this behaviour. Gold has long been embedded in household savings culture, whether through jewellery, bars or structured products.

In uncertain times, Malaysians historically gravitate toward gold as a stabilising anchor — a pattern now playing out again, amplified by the exceptional performance of gold over the past year.

At the same time, Bitcoin’s rise over the past decade cannot be ignored. Crypto awareness in Malaysia has expanded rapidly, and hundreds of thousands of Malaysians have registered accounts with regulated digital asset exchanges.

Yet awareness does not equal allocation. Compared with gold, Bitcoin remains held by a smaller segment of households and typically at more modest weightings.

The current pullback does not negate Bitcoin’s long-term case.

History suggests that periods of consolidation and drawdown have often preceded the next phase of adoption and price appreciation.

Bitcoin’s fixed supply, growing institutional participation, improving regulatory clarity and expanding real-world use support the view that, over the long run, its trajectory is more likely upward than not.

This does not mean Bitcoin is a safe haven — it is not. But it does mean it increasingly deserves a place in diversified portfolios.

For most investors, Bitcoin is better understood as a long-term growth asset with asymmetric upside, rather than a short-term trade or substitute for gold.

So what should investors do now? 

For gold holders, the recent rally does not automatically justify selling — but neither should it be assumed to be repeatable.

Gold’s primary function remains capital preservation. Investors holding gold for diversification or inflation protection may reasonably continue doing so, while recognising that returns of the past year are unlikely to be the norm going forward.

For Bitcoin holders, perspective matters. Long-term investors who believe in Bitcoin’s structural role may choose to hold through volatility, recognising that drawdowns are part of the asset’s maturation.

Short-term investors may need to reassess position sizing rather than react emotionally to price moves.

For those considering buying more, the key is intention. Gold and Bitcoin serve different purposes. Gold protects. Bitcoin seeks growth.

A measured allocation to each — sized appropriately to one’s financial situation and risk tolerance — allows investors to balance stability with long-term opportunity.

The broader lesson is not about choosing sides.

Gold’s exceptional rise reflects a rare moment of global caution. Bitcoin’s weakness reflects its unfinished journey toward maturity, not its irrelevance.

For Malaysian investors navigating uncertain markets, clarity of purpose may matter more than short-term price movements. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT