While gold is hitting new highs, the oft-touted “digital gold” has failed to keep up.

Bitcoin proponents have long claimed that the cryptocurrency’s unique selling point is that it’s a long-term store of value, just like the precious metal. And the biggest and oldest virtual coin has in the past performed like gold.

But that isn’t happening right now. Gold today hit a new all-time high of $2,483 per ounce as geopolitical instability—particularly in the Middle East—and hopes the Federal Reserve will soon slash interest rates have created more demand for the shiny commodity.

Meanwhile, Bitcoin’s volatility is soaring and its price is 17% lower than the all-time high it hit in March of $73,747. Why?

Bitcoiners like Custodia Bank CEO and founder Caitlin Long have previously said that more investors flock to the biggest digital coin during times of uncertainty due to it being a scarce asset—since only 21 million Bitcoins will ever be produced.

But while that may have briefly been the case during the banking crisis of 2023, when Bitcoin’s correlation with tech stocks dropped, it isn’t now. 

“I think what we’re seeing here is that investors don’t yet move into Bitcoin during periods of uncertainty,” Kaiko research analyst Adam Morgan McCarthy told Decrypt. 

“It failed to attract safe haven flows in April [during an escalation of conflict in the Middle East], it has done so again now, and is more often correlated with equities during heightened periods of stress in the market.”

Amberdata’s director of derivatives Greg Magadini added that while gold and Bitcoin should be correlated, there are other forces at play: the U.S. election in November.

Republican frontrunner Donald Trump has come out as the crypto-friendly candidate—at least more so than the Democratic Party’s Kamala Harris. But as odds have increased for Harris becoming the next U.S. president, speculators have put bets on a less friendly regulatory landscape for the crypto space. 

“In theory, inflationary forces moving gold higher would likely help Bitcoin move higher as well, although the Democratic ticket is bearish crypto, potentially explaining the price divergences last week,” he said, referring to Bitcoin’s big dip just days ago.

CEO of Trading platform Cube.exchange Bartosz Lipinski said that other market factors need to change before Bitcoin truly becomes “digital gold.” 

“Yes, volatility has smoothed out when compared against previous market cycles, but the asset class still has a ways to go in terms of adoption, liquidity, and even a more fully diversified futures market, if we are to consider these assets to be even remotely similar,” Lipinski said. “Until they are, it would make sense to continue seeing divergences in performance.”

And this week will be pivotal for investors, CryptoQuant analyst Burak Kesmeci said. Federal Reserve Chairman Jerome Powell will speak Friday—and what he hints about future interest rate movements will be key for investors.

“If recession risks intensify and investors lose confidence in Bitcoin’s ability to preserve value, we may see this correlation [between gold and Bitcoin] weaken further, potentially leading to increased volatility in Bitcoin’s price,” he said.

Edited by Ryan Ozawa.