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Mark Hulbert: Russia’s invasion of Ukraine is bitcoin’s first big test to topple gold as a safe haven

If a contest were held over which is the better hedge against geopolitical risk, gold is beating bitcoin.

Since early November 2021, when Russian troop movements were first reported near the Ukrainian border, the price of gold bullion

has gained more than 6% while bitcoin

has lost more than 30%.

Though hedging against geopolitical crises is not the only benefit that devotees claim for bitcoin and gold, it is one of the more widely cited. Russia’s invasion of Ukraine represents perhaps the first significant head-to-head test of this claim.

This current geopolitical crisis is just one data point, and it would be premature to draw general conclusions from it. To paint a more comprehensive picture, I examined the correlations between gold and bitcoin with the Economic Policy Uncertainty (EPU) index. This index was created several years ago by Scott Baker of Northwestern, Nicholas Bloom of Stanford, and Steven Davis of the University of Chicago.

I went back five years to analyze the correlations, with bitcoin then trading for around $5,000. I examined all rolling 7-day and 30-day returns since then. Over both time frames, bitcoin’s correlation with the EPU index was negative, though of marginal statistical significance. A negative correlation means that bitcoin should fall when uncertainty rises and vice versa — which is just the opposite of what you want from a hedge.

In gold’s case the correlations were barely positive, and of no statistical significance. You shouldn’t be surprised by this. As I reported several weeks ago, based on an entirely different approach to measuring risk going back five decades, gold falls almost as much as it rises in the wake of uncertainty.

Note that I am not taking a position on gold or bitcoin, or on any other claims about why these two investments are worthy long-term holdings. But if you own either of them on the theory that they are good hedges against geopolitical uncertainty, you may want to reconsider.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at

More: Bitcoin builds momentum as war inflates demand. But cryptos face a Catch-22.

Plus: Russia’s invasion of Ukraine could keep stocks sliding for weeks before the market finally hits bottom

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