Bitcoin underperforms as Gold, S&P 500 reach record high

• Bitcoin has underperformed compared to Gold and the S&P 500 since the February 3 market crash.
• Investors are rotating capital to Gold due to its quality as a safe haven in periods of macroeconomic uncertainties.
• Creating a Bitcoin strategic reserve could incentivize investors to allocate funds to the top crypto.

Bitcoin (BTC) traded above $98,000 on Thursday, continuing its range-bound movement, while traditional assets, including Gold and the S&P 500, set new highs. Meanwhile, asset manager VanEck noted that Bitcoin could help reduce the US national debt.

Bitcoin moves range-bound amid rise in Gold and stocks

Bitcoin moved above $98,000 on Thursday, following a dip toward $93,000 earlier in the week. 

With its range-bound price movement in the past few weeks, the top cryptocurrency has failed to recover the $100,000 key level since the February 3 market crash triggered by global trade war tensions.

US President Donald Trump's plans to place tariffs on China, Canada and Mexico have remained a shadow over the crypto market.

As a result, investors have been shifting their attention away from crypto to Gold, which hit an all-time high of $2,954.69, and its market cap reached $20 trillion.

Gold's rise stems from its safe haven status as investors seek safety with recent macroeconomic uncertainties, including fears of a global trade war, the US debt crisis and rising inflation.

Bank of America's fund manager survey also shows that 58% of fund managers expect Gold to bring its best performance in a trade war, according to The Kobeissi Letter in a Thursday's X post.

Bitcoin has previously been viewed as a safe haven asset, fondly regarded as "digital gold." However, its recent price movement — especially since the introduction of Bitcoin ETFs — has seen it behave more like a risk asset.

Surprisingly, the S&P 500 is hitting new all-time highs alongside Gold. A rally in chipmakers' stocks largely drove the surge.

This indicates Bitcoin's year-long positive correlation with the S&P 500 is slowing down.

However, growing narratives in the US toward the creation of a strategic Bitcoin reserve could revert attention toward the top crypto.

If the government moves to establish a strategic reserve, it will imply that it acknowledges Bitcoin as a resilient asset.

Asset manager VanEck stated that the US could shed $21 trillion off its debt should it follow the Bitcoin Act path proposed by Senator Cynthia Lummis.

The Bitcoin Act proposes that the US Treasury acquire up to 1 million BTC over 5 years. The assets would be held in a Strategic Bitcoin Reserve for at least 20 years as a store of value to strengthen the nation's balance sheet.

"Our analysis suggests this reserve could offset around $21 trillion of national debt by 2049. That would amount to 18% of total US debt at that time," VanEck said in a statement on Thursday.

If the US government follows this path, it could cause investors to allocate funds to Bitcoin as they have done with Gold in recent weeks.

---