Charlie Morris on Bitcoin's Market Test: Why Digital Assets Face Headwinds Against Gold

As we move deeper into 2026, a persistent challenge confronts bitcoin advocates: the world’s leading cryptocurrency has underperformed gold and other hard assets when many expected it to shine. While precious metals have delivered substantial returns amid economic uncertainty, bitcoin’s recent performance tells a different story. Industry analysts and investment professionals are grappling with this divergence, seeking explanations for why the “digital gold” narrative may need revisiting—at least in the near term.

The Performance Gap: Bitcoin Lags While Gold Surges

The numbers paint a stark picture. Over the past twelve months, bitcoin has declined 28.54%, currently trading around $69,110. Meanwhile, gold has experienced a dramatic ascent, jumping over 80% as investors flee to familiar safe-haven assets during geopolitical tensions and macroeconomic uncertainty. For a cryptocurrency often touted as an inflation hedge and store of value, this divergence raises uncomfortable questions.

The divergence reflects a fundamental reality: when markets become volatile, capital flows toward what investors understand. Gold has centuries of trust baked in. Bitcoin, despite its technical robustness over fifteen years, remains the new kid on the block in the eyes of institutional money.

Tech Stocks Correlation Insight from Charlie Morris: Uncovering Bitcoin’s Hidden Link

Charlie Morris, Chief Investment Officer at ByteTree, offers a compelling perspective on bitcoin’s recent struggles. Rather than viewing bitcoin’s performance independently, Morris positions it within the broader tech ecosystem. “Both gold enthusiasts and bitcoin supporters cite similar reasons for their investments: limited supply, inflation, economic instability, and more,” Morris observes. “I see gold as the reserve asset for the physical world, and bitcoin for the digital realm.”

The critical insight: bitcoin’s recent decline mirrors the performance of internet stocks—a correlation that has persisted throughout bitcoin’s existence. This means bitcoin’s price pressures aren’t necessarily a failure of the asset class itself, but rather a reflection of broader tech sector headwinds affecting everything from software companies to digital infrastructure plays. According to Morris’s framework, understanding bitcoin’s performance requires viewing it through a technology lens, not merely a monetary asset lens.

This correlation suggests that bitcoin’s recovery may be tied to broader technology sector sentiment, independent of whether gold continues its ascent. When markets rotate back into digital assets and internet-related investments, bitcoin could benefit from the same tailwinds that support traditional tech stocks.

Supply Redistribution: The Overlooked Driver of Price Pressure

Beyond market sentiment, several investment professionals point to structural factors constraining bitcoin’s price. Mark Connors, Chief Investment Officer at Risk Dimensions, highlights an often-overlooked dynamic: “The issue isn’t a lack of demand, but rather a redistribution of supply. Large institutional ETF inflows are absorbing coins sold by early holders, resulting in a shift of ownership rather than a decline in interest.”

This distinction matters enormously. When early bitcoin adopters sell into institutional ETF demand, the supply changes hands but doesn’t disappear from the market. The coins that once belonged to long-term believers now reside in the portfolios of institutional investors—a potential precursor to different holding patterns. Rather than indicating weakening demand, this shift may signal a maturation of the market, where bitcoin becomes increasingly owned by entities with longer time horizons.

The Case for Patience: Long-Term Inflation Protection Through Network Effects

Despite near-term headwinds, several prominent voices maintain conviction in bitcoin’s long-term potential. David Parkinson, CEO at Musquet Bitcoin Lightning, argues that premature dismissals of bitcoin’s inflation-hedging properties miss the forest for the trees: “Thanks to its capped supply and expanding network, bitcoin has consistently outperformed inflation and even gold over the long term. Bitcoin is emerging as the native monetary asset of the internet.”

This argument rests on a crucial distinction: short-term market cycles versus long-term structural trends. While 2025 may have belonged to precious metals, bitcoin’s fixed supply of 21 million coins creates an asymmetric value proposition that gold—which can be mined indefinitely—cannot match. As the internet economy expands and digital transactions accelerate, bitcoin’s utility as a native digital asset may eventually outweigh traditional gold’s historical advantage.

When Capital Rotations Could Favor Bitcoin Again

Andre Dragosch, analyst at Bitwise, suggests the timing of capital rotation into bitcoin may be approaching. “The current surge in precious metals is largely driven by investor habit—during uncertain times, people turn to assets they’re familiar with, such as gold and silver,” Dragosch explains. “Despite its superior store-of-value properties, bitcoin is still seen as a riskier investment.”

However, Dragosch identifies a potential inflection point: relative valuation. “Relative to gold, bitcoin is now as undervalued as it was during the FTX collapse in 2022. There’s significant underpricing compared to both the current macroeconomic climate and the global money supply, which could resolve in bitcoin’s favor in the coming months.”

This valuation perspective introduces a temporal element to the bitcoin debate. If Dragosch’s assessment holds, the very headwinds that currently pressure bitcoin—the rush to traditional assets and lower relative valuations—may contain the seeds of future outperformance when capital rotation occurs.

The Emerging Consensus: Bitcoin’s Moment May Be Waiting in the Wings

While the immediate case for bitcoin faces stiff headwinds from resurgent precious metals and persistent macroeconomic uncertainty, the longer-term case remains intact for many industry professionals. Charlie Morris’s insight about bitcoin’s tech stock correlation, Parkinson’s emphasis on network effects, and Dragosch’s valuation analysis collectively suggest a market in transition rather than one in terminal decline.

The debate ultimately hinges on timeframes. In the near term, traditional assets may continue their ascent as investors seek familiar ground. But as this cycle matures and capital eventually seeks new opportunities at more attractive valuations, bitcoin advocates believe the digital asset’s superior technical properties—capped supply, borderless transferability, and internet-native characteristics—will eventually prevail over the historical entrenchment of gold.