Are Bitcoin and Gold Complements or Substitutes?
Extreme monthly movements provide some evidence of substitution, but bitcoin’s volatility prevents any simple conclusion
Abstract: An examination of the five largest monthly increases and declines in gold prices from February 2014 through June 2026 finds that bitcoin sometimes moved in the opposite direction, but the relationship was inconsistent and heavily affected by bitcoin’s extreme volatility.
Question
During the February 2014–June 2026 period, what were the five months with the largest increases in gold prices, and what happened to bitcoin during those months? What were the five months with the largest declines in gold, and what happened to bitcoin?
Short Answer
Bitcoin rose during three of the five strongest monthly increases in gold and during four of the five largest gold declines. The extreme observations therefore provide some evidence that gold and bitcoin can act as substitutes, particularly when gold falls, but they do not reveal a stable inverse relationship. Sometimes the two assets move in opposite directions; at other times they rise together.
The analysis uses 150 first-of-month price observations from January 1, 2014, through June 1, 2026, producing 149 monthly changes. Each observation is labeled by its ending month. Thus, the March 2026 observation measures the change between February 1 and March 1, 2026, rather than the change over the March calendar month.
Five Largest Monthly Gains in Gold
March 2026 observation: Gold rose 14.5 percent, while bitcoin fell 14.6 percent.
August 2020 observation: Gold rose 10.9 percent, while bitcoin rose 27.4 percent.
July 2016 observation: Gold rose 10.3 percent, while bitcoin rose 26.0 percent.
December 2022 observation: Gold rose 9.5 percent, while bitcoin fell 17.2 percent.
March 2016 observation: Gold rose 9.1 percent, while bitcoin rose 16.6 percent.
Bitcoin increased in three of these five observations. Its average return was approximately 7.7 percent, but the results ranged from a 17.2 percent decline to a 27.4 percent gain.
Five Largest Monthly Declines in Gold
April 2026 observation: Gold fell 9.7 percent, while bitcoin rose 3.6 percent.
December 2016 observation: Gold fell 9.3 percent, while bitcoin rose 3.7 percent.
March 2021 observation: Gold fell 7.4 percent, while bitcoin rose 48.0 percent.
August 2015 observation: Gold fell 6.8 percent, while bitcoin rose 8.9 percent.
July 2021 observation: Gold fell 6.7 percent, while bitcoin fell 8.5 percent.
Bitcoin increased during four of the five largest gold declines. Its average return was approximately 11.1 percent, although that figure is heavily influenced by bitcoin’s 48 percent increase in the March 2021 observation. Excluding that observation, bitcoin gained an average of only about 1.9 percent during the other four periods.
Comment One: The Largest Gold Declines Provide the Most Suggestive Evidence of Substitution
Bitcoin rose in four of the five observations when gold experienced its largest declines. This pattern is consistent with investors sometimes shifting between the two assets rather than treating them as interchangeable components of the same portfolio.
The evidence is not overwhelming, however. One extraordinary bitcoin gain in the March 2021 observation accounts for much of bitcoin’s average increase during the five largest gold declines. The pattern could also reflect bitcoin-specific developments rather than direct movement of capital from gold into bitcoin.
Comment Two: Strong Gold Markets Do Not Consistently Hurt Bitcoin
Bitcoin increased in three of the five observations when gold recorded its largest gains. In the August 2020 and July 2016 observations, both assets rose sharply. These episodes suggest that gold and bitcoin can benefit simultaneously from monetary concerns, declining confidence in conventional assets, or increased demand for alternative stores of value.
Gold and bitcoin may therefore sometimes be complements in investor psychology, even when they compete for marginal portfolio allocations.
Comment Three: Some Recent Observations Show Clear Divergence
The two consecutive 2026 observations provide the clearest recent example of possible substitution.
Between February 1 and March 1, gold rose 14.5 percent while bitcoin fell 14.6 percent.
Between March 1 and April 1, gold fell 9.7 percent while bitcoin rose 3.6 percent.
This rapid reversal is consistent with capital moving between gold and bitcoin. It may help explain why the statistical relationship between the two assets became more negative during the recent period.
Two observations cannot establish that such rotation actually occurred, however. The divergence could also have resulted from separate news or market forces affecting the two assets differently.
Comment Four: Bitcoin’s Volatility Complicates the Comparison
Bitcoin’s movements were much larger than gold’s in several of these observations. For example, gold fell 7.4 percent between February 1 and March 1, 2021, while bitcoin rose 48 percent. That bitcoin return is an influential observation in this small group because it substantially raises bitcoin’s average return during the five largest gold declines.
It should not necessarily be called a statistical outlier, however, because similarly large monthly movements have occurred elsewhere in bitcoin’s highly volatile history.
Between July 1 and August 1, 2020, gold gained 10.9 percent while bitcoin gained 27.4 percent. These episodes demonstrate that bitcoin is not simply a modern version of gold. Bitcoin is driven by a much larger speculative cycle, and its volatility can overwhelm the underlying relationship between the two assets.
For that reason, averages calculated from only five extreme gold movements should be interpreted cautiously.
Comment Five: Extreme Months Do Not Establish a Stable Relationship
The observations provide examples of both substitution and common movement. Bitcoin rose in seven of the ten periods examined, including periods when gold was rising and periods when gold was falling.
The appropriate conclusion is therefore limited. Gold and bitcoin sometimes appear to compete for investment capital, particularly during recent periods of sharp divergence, but there is no consistent rule that a rise in one produces a decline in the other.
This conclusion is consistent with the full-period regression, which finds almost no stable relationship between monthly gold and bitcoin returns. The extreme-period analysis provides useful illustrations, but it does not overturn the broader statistical evidence.
Conclusion
The extreme observations suggest that gold and bitcoin can occasionally substitute for one another, but they more often respond to different forces or participate in the same broad demand for alternative assets. Bitcoin’s much greater volatility makes it difficult to treat it as digital gold or as a dependable complement to gold in a diversified portfolio. The evidence therefore supports neither a stable positive relationship nor a stable negative one.
Data Note 1—Gold: Gold prices come from Official Data’s Gold Historical Prices monthly table. The observations are nominal U.S. dollars per troy ounce. Official Data describes the series as based on monthly average closing prices for CME Group gold futures and presents the table as first-of-month observations. Gold Historical Prices.
Data Note 2—Bitcoin: Bitcoin prices come from Official Data’s Bitcoin Historical Prices monthly table. The observations are nominal U.S. dollar values for one bitcoin reported at the first of each month. All percentage changes used here were independently recalculated from consecutive prices and matched the month-over-month returns reported in the source table. Bitcoin Historical Prices.