Digital gold: How crypto stacks up against the dollar and the most popular safe haven asset

The National

01-05-2025

In the aftermath of a chaotic economic scenario in which US-led tariffs upended stock markets and riled economic projections, gold has shone brightly, reinforcing its safe haven status. Also falling victim to the tariff mayhem were cryptocurrencies, although they seem to have held their ground pretty well, having been able to recover following a brief dip. As such, crypto proponents are touting digital assets as the new-age safe haven. Though cryptocurrencies are still flawed, they do not have physical limitations and are potentially higher-yield, and executives believe placing your money on them is a safer bet than physical commodities that are harder to move around and whose supply can be limited. The National spoke to them at the Token2049 Dubai summit on Wednesday to find out if gold has met its match. The purpose of cryptocurrencies has always been to be an alternative investment asset that is safe, at least according to how it's built – even though its biggest weakness might be its unpredictable and highly volatile nature. Economic volatility has traditionally lifted safe haven assets such as gold. The precious metal, considered a hedge against inflation, has been on a tear recently: it soared past $3,500 an ounce last week and is up by nearly a quarter in 2025. That was in response to economic and investor uncertainty stemming from tariffs introduced by the US, its subsequent trade war most notably with China and concerns over a global recession. Cryptos, meanwhile, after a record run triggered by US President Donald Trump's promise to embrace and "fight like hell" for the asset, wobbled amid his tariff episode, but has largely maintained their strength. The view whether or not cryptos are a safe asset will then largely depend on fundamentals and preferences. Gold and cryptos are "two considerably different things", but the latter, Bitcoin in particular, as "digital gold" is a narrative that's "really strong", said Kean Gilbert, Head of Institutional Relations of Lido Finance, the largest liquid staking solution for Ethereum. "The idea of having Bitcoin as digital gold and being able to transact with it and send it globally around the world without having to go through an intermediary is a really powerful use case," he told The National. That's compared with gold and "the physical narrative and carrying that in vaults for a younger generation, that might not be as appealing compared to an older generation that likes physical gold". Vincent Chok, the founder and chief executive of First Digital, which is the issuer of the world's fifth-biggest stablecoin by market capitalisation, agrees with the "digital gold" pitch. "Bitcoin ... is a lot easier than storing gold. You can see gold prices going well, but the reason why is because there's still a lot of people who are not familiar and do not know Bitcoin, so what they fall back [to] is gold," the told The National The dollar has also slumped in the wake of the economic chaos. That has highlighted, especially to those outside of the world's largest economy, "the realisation that the US economy or printed dollars are not as safe" as perceived, said Vugar Sade, chief operating officer of crypto exchange Bitget. "In most of the developing world, the dollar was the way you save your money and whenever you have an unstable economy, huge inflation or weaker currency, you would turn into dollars," he told The National. "But now people realise that dollars are losing value," he added, noting that, comparatively, the same situation applies to gold. Bitcoin, the world's first and biggest cryptocurrency, will be the "anchor", having proven itself over the past 10 years despite several crypto winters and industry scandals. It is also viewed as the "most important payment method" for artificial intelligence, the technology seen to shape the future society, said Ryan Chow, chief executive of Solv Protocol, the first on-chain Bitcoin reserve. Simply put, it's because "AI cannot take [physical assets such as] gold for payments", he told The National. The same could be said for dollars. In the early days of cryptocurrencies, people did not pay much attention to it, but its growth – and the wealth it generates – has legitimised its existence. While its utility is still both in its infancy and highly debated owing to the lack of oversight, it may be turning out that it might be built for unprecedented economic situations – not to mention in line with the future of digital finance. "It was born precisely for this moment that we have in time, where between tariffs and geopolitical uncertainty, you need to have something that you can sort of have as a backup," Yat Siu, co-founder and executive chairman of Hong Kong-based venture capital fund Animoca Brands, told The National. "When you think about something like crypto, you have to think of it as something that is uncorrelated from the rest of the world. It's an asset class that is a growth asset class that sits in this belief that the world is going to become." That means any uncertainty in the global economy can cement crypto use, as currencies that can be transferred freely and used as a store of value. Still, as with any asset, caution is the top priority; investors are urged to "stick to fundamentals", as there is no magic bullet or formula, said Changpeng Zhao, the founder and former chief executive of the world's biggest crypto exchange, Binance. "Don't get too excited. What happens in traditional investing markets, the same thing that happens here [in crypto]. Don't follow or buy just because you saw somebody tweet about it," he told an audience at Token2049. "Don't just follow blindly. Don't invest in a large number of tokens or coins. If you don't understand, don't invest ... if it doesn't work, pivot; if it works, then scale."