Is Bitcoin Still 'Digital Gold'? How Investors See It Now

0:00The Take on the Week podcast is brought to you by Invesco QQQ. There are risks when investing in ETFs, including possible loss of money. ETFs' risks are similar to those of stocks. Investments in the tech sector are subject to greater risk and more volatility than more diversified investments. The NASDAQ 100 Index includes the 100 largest non-financial companies listed on the NASDAQ. An investment cannot be made directly into an index. Before investing, consider the funds' investment objectives, risks, charges, and expenses. Visit Invesco.com for a prospectus containing this information. Read it carefully before investing in Invesco Distributory Zinc. Hi, Dallas. Hi, Miriam. So today's show is interesting because we're going to be talking about an asset that many have considered in the past to be a safe haven asset, and that's Bitcoin. And I think that's appropriate because we've had a lot of geopolitical turmoil this past week. No better time for safe havens than with what's going on these days. But is Bitcoin a safe haven? That's something that we will discuss later in the show. Yeah.

1:00It's a super interesting question. But of course, what's right now kind of occupying everybody's minds in the market probably will be for the next couple of weeks if timelines play out as expected is Operation Epic Fury, the US's strikes on Iran and the resulting kind of fallout throughout the mid-east region. So off the bat, stocks have not had, I would say, overall an enormous reaction thus far. There were some updates, some down days. And surprisingly, that's actually what you would expect based on prior kind of geopolitical events. Yeah, it's really interesting. Analysts at Morgan Stanley looked at a long series of prior geopolitical events, the start of various conflicts. And actually, while there is volatility in the short term, in after, you know, one months, three months. Yeah. And once, 12 months, you see stocks are usually up after these conflicts.

2:00So that's pretty positive for those of us who just own stocks and bonds that are holding on tight and hoping that diversified portfolio will win out. Yeah. As much as you're obviously concerned with the human and sort of political and broader dimensions of all these things from an investment point of view, you probably shouldn't really do much of anything if you're the kind of buy and hold investor that I think a lot of our listeners, our equity strategist of Wells Fargo did a similar analysis. And they looked, I was pretty interested because they looked all the way back to like, you know, kind of throughout the 20th century at geopolitical events. And the average one year return on the S&P was, you know, in the neighborhood of 7%, which is kind of what it is historically anyway. So the one thing that we are seeing is right now is a surge in oil prices. That's right. That's why this conflict does seem unique because it is happening not just in the kind

3:01of oil producing region of the world, the Middle East or one of the major oil producing regions, but it seems like the immediate kind of aftermath has been worries about oil, infrastructure, shipping and production. Why is that, Miriam? So Iran is only three to four percent of global oil production itself, but, you know, we have all become armchair experts on a special passageway that's called the Strait of Formos, which is the passageway through which 20% roughly of global oil production goes. And that is oil that's coming from the Gulf States. So it's the region itself as a whole is very important in the oil production world. Effectively, the Strait of Formos is closed right now because there's just too much, you know, risk for an oil tanker to be passing through there. Yeah, it seems like a critical way in which this conflict will play out will be to what degree can the U.S. stop Iran from striking oil and energy infrastructure around the region.

4:04Already Brent crude futures as we're talking on Thursday have been up about 15% over the week. It's literally like an epic move, but other downstream prices like, for example, diesel fuel prices, futures for those have already surged and diesel prices, of course, pretty quickly translate into consumer prices, right, you know, the trucks that ship the things that get to the store and whatnot. Exactly. So that means inflation. And that means inflation. And that's why the possibility of an oil supply shock is really, I would say, markets main preoccupation, not just because the price of oil, but because of what it means for inflation. And we've seen U.S. markets really react on that basis. So for example, the futures market, which predicts what sort of interest rates might be in the future, before the strike started, that market was pricing in about a, say, 80% chance of the Fed cutting two times or more this year, that is now down to less than 50%.

5:08And what that means is that investors are basically thinking that the Fed is going to have its hands tied by worries about, even if inflation isn't actually arriving, that the concern about the potential for price increases will stay the Fed's hand. And despite, you know, a Trump appointed Fed chair, likely coming into office at some point this year, that the market doesn't think the Fed will have room to cut rates as aggressively as it might have before this start. And the real risk, of course, is that this is not a short-lived conflict as President Trump has said, and that it drags on, because, you know, there's no way to know exactly how long it will drag on. And if it does drag on, that's when the concerns around inflation will spike, and, you know, when we may see a bigger sell-off in stocks and bonds again. Well, and interestingly, looking at what's happening in the U.S. Treasury market, and also the market for gold, those are two typical safe havens, right? You would think of those things as people buy when they're worried about kind of tensions or geopolitical risks elsewhere, but neither of those markets have done very well in the

6:10aftermath. U.S., ten-year U.S. Treasury yields have been going up. That means the bonds are selling off. Gold has not rallied. Gold has come down, and both of those things are related to this concern about higher inflation and higher interest rates. Obviously, higher interest rates mean that your Treasury bond isn't necessarily worth as much. And gold, I mean, look, gold is already rallied. So enormously, right, past 5,000, which is just a crazy sort of level. So to some extent, there's like, well, how much higher could gold go? But people are saying, what else do I buy? Where do I look to be defensive? Well, and that's why interestingly, when you look under the hood of the stock market, which as we mentioned has been volatile, but hasn't made really enormous moves in either direction thus far, some people are buying of all things, it seems software companies. We talked about this a couple of weeks ago on the podcast, software sold off a lot over fears around AI, business software.

7:10A lot of people thought, oh, anthropic launch these new products, businesses will not need to buy software anymore, and I'm going to sell my software stocks. And software was sold somewhat indiscriminately, the entire index cratered. And now we see signs of life. It's coming back. Interestingly, Jeffrey's analyst Brent Phil, who was our guest on that episode, said now is a great buying opportunity. So it may be that people took the hint, not necessarily from Brent, but maybe from Brent, from the prices falling as far as they did and started buying. And that's interesting because this coming week, we have earnings reports from a couple of these major software companies that sold off, Adobe and Oracle are both reporting. So I think it'll be interesting to see how their stocks react to their earnings, whether people are reacting to the actual substance of the earnings or fears around AI. And what the companies say on their earnings calls about how they're incorporating AI into

8:11their own software, because that's the counter narrative to the AI will replace software. And anything else they say to position themselves more positively for the long term. Adobe and Oracle are both really interesting. Oracle is interesting because Oracle is really, I think, in the markets, focused because of how much it is investing in AI. Because remember, Oracle kind of spans both enterprise software and also sort of infrastructure, the stuff that companies will need to use AI data centers and whatnot. And Oracle has been spending enormous, enormous amounts of money and has been borrowing. And so investors are really focused on that company's indebtedness and also its free cash flow measures. Can Oracle produce the kind of regular cash flow that it will need to finance this? And if it doesn't, how will it then kind of gather that money? So that free cash flow and financing question is really vital to a lot of the companies in the AI complex that are spending tons of money to invest, right? Because the theory is that if you don't put this stuff in the ground now, it's going to

9:11be too late in a couple of years. So spend every nickel available. And so the question is how many nickels are available for a company like Oracle? Adobe, on the other hand, is, I think, more of a question on, like, look, this is a company that sells tools to humans to do things, right? And its products are so ingrained in the world of design, video production. These are like core tools. My husband is a video director and he uses Adobe all day long. And this is like the software that's like his lifeblood. The question is, could that be replaced by something else? Like, could you just ask, you know, name your AI sort of agent of choice? Like, hey, can you, can you, you know, take this person out of this photo or whatever, you know, something? And it'll do that and you don't need that subscription. So, yeah, so Adobe, I think, is a real read on that. And I think that earnings probably give less clarity on that kind of thing. Because really, people are talking about what are these products and what's this company going to look like in a few years. And, and so that just plays out more slowly. And of course, you know, Adobe will talk about the ways that it is integrating AI, the

10:14way that its tools are still relevant in an age of AI. How can augment what you do with AI? But, you know, that might just be kind of a harder sort of message delivered to people versus, hey, you know, we're putting this, we're opening this data center and we've signed up this many people and they're going to use it. Adobe is not opening data centers. Yeah, so, so that's, so that's why I think those two earnings in particular will be really interesting to look through that lens as investors think about how, where this trade might go from here. Another thing that we might be hearing more about this coming week, or at least President Trump would like us to be hearing more about is the Clarity Act, which is a piece of legislation that he's been pushing Congress to pass that's supposed to establish a regulatory framework for digital assets like stablecoin and Bitcoin. But banks have been pushing back because they don't want customers to be, or consumers to be able to earn significant yield from holding stablecoins because that would put their deposits at risk. So, just a little bit of background.

11:15So, the Genius Act, which was passed and became law and was meant to sort of create a regulatory framework for stablecoins. That did say that a stablecoin cannot pay yield, right? So, that's already in the law. However, a lot of stablecoins will earn you rewards, you know, the broker will pay you rewards. Now, is that a form of yield or is that something different? That's the argument that companies like Coinbase are having with the banks and that has so far derailed this legislation because some people have inserted, I think it's section 404 is like a clause within a section number doing a little, you know, a little light lawyer here on the side. People are, you know, that the banks are trying to get language into the Clarity Act that will, as they say, would close that loophole. That you can't pay your rewards, right? Yeah, that rewards are basically the same as yield from the bank standpoint and you can't do that. In fact, already said you can't do that, you shouldn't be able to pay these rewards. And why the banks care about it is that they believe that that sort of reward and yield

12:18is a competitor to deposits. I mean, and it is, most banks aren't really paying very high yields for savings right now. The reason that's relevant to Bitcoin and sort of getting into this larger conversation is that people feel like one thing that has been dogging Bitcoin because Bitcoin has failed to act like a safe harbor. If it is digital gold, it has not kept up with physical gold in recent months. Despite the fact that there is a finite amount of Bitcoin out of the universe. And one thing people kind of have pointed to is increasing worries that the Clarity Act will not go forward. And the Clarity Act, by the way, has other provisions that have to do with like, what, you know, what is a digital commodity, where can they trade, you know, making sure to say that those are not securities and so they're not SEC regulated, they're CFTC regulated, etc. So there's a lot of important stuff about just like the legal framework and what kind of legal obligations you have to say, where's this coin coming from, blah, blah, blah. Anyway, so there's a lot of really important kind of underpinnings to the future of crypto

13:19markets within that legislation. And so people say that's one thing that's been sort of kind of haunting the Bitcoin market these days. Meaning that it hasn't passed yet. And once it does pass, this will sort of solidify the foundation underneath Bitcoin, allowing it to emerge from the crypto winter. Yeah. So to have that conversation, we spoke with Marion Leibor, she is a senior strategist and managing director at Deutsche Bank. And she writes research notes about what is going on in crypto, about what's happening with Bitcoin and the broader sort of payments, landscape and other things, looks at stable coins quite a bit. But tell us, before we get to that conversation with Marion, we want to hear from you listeners about how you are investing and how you've changed your portfolio if at all since the US strikes on Iran. Have you started buying gold? Have you, you know, bought oil or tried to get exposure to oil? Have you moved into defense stocks? Have you sat tight and just waited it out?

14:21We'd love to hear more from you. So please send us an email at TakeOnTheWeek at WSJ.com. All right. Well, we're going to get to that conversation with Marion about Bitcoin, stable coins and the world of crypto after the break. The TakeOnTheWeek podcast is brought to you by Invesco QQQ. There are risks when investing in ETFs, including possible loss of money. ETFs risks are similar to those of stocks. Investments in the tech sector are subject to greater risk and more volatility than more diversified investments. The NASDAQ 100 Index includes the 100 largest non-financial companies listed on the NASDAQ. An investment cannot be made directly into an index. Before investing, consider the funds investment objectives, risks, charges and expenses. Visit Invesco.com for a prospectus containing this information. Read it carefully before investing in Vesco Distributors Inc. All right. Welcome back. We are joined by Marion Labors. She is a senior strategist and managing director at Deutsche Bank. Marion, welcome to the show. Thank you very much.

15:22Very glad to be here. For a long time, I think the tagline that Bitcoin had was digital gold. It was a commodity in the way that gold is. There's a limited supply of it and it's something that will hold its value over a long period of time. It's kind of inflation proof. People thought of it as maybe something to turn to when times were risky. There were times when that seemed to hold up days when gold would go up, Bitcoin would go up. Over those last six months, you've been talking about that period of time since last October when Bitcoin has gone down significantly in price from well over 100,000 to now in the 60, 70,000 range, gold has of course been surging. Do you think that we can put to bed the idea that Bitcoin is digital gold or is there something else that's breaking that correlation right now? I think these days we can't say Bitcoin is digital gold in a long era. We choose to be the case, but clearly as you mentioned, this gold has been outperforming

16:24last year. I mean, it was over 60% up in 2025, so record performance for gold. If I look at the few-dollar reasons for that, it's because Central Bank, especially the BRICs, have been buying a lot of gold. We had some geopolitical uncertainty as well. Bitcoin was still considered as a safe asset, and for this reason, we've seen a record performance for gold. Last year, for Bitcoin, it was not the case. Bitcoin was done by over 6% in 2025. You've said that you don't see Bitcoin as a means of payment. It's not a currency, but stablecoins are. What is the distinction there, and why would you differentiate between the two? I'm an economist by training, so I like to define digital assets and currency, and where we use to define a currency, it's when it's a store value, a means of payment, and you need a account. And if I look at Bitcoin, I think we agree that it's not very stable, it's very volatile,

17:31we cannot pay with Bitcoin, it's not accepted everywhere. If I want to pay for a coffee in London, it's going to be very, very difficult. I don't see Bitcoin as a means of payment, I don't see Bitcoin as a currency, I don't see Bitcoin as money, it's the way I see it, it's not as a currency, it's as a crypto asset. The way I see stablecoins is very different, so stablecoins have been, the idea of stable coins is to create a cryptocurrency which is stable. To make your currency stable, we have four different ways, we can pack them via an algorithm, we can pack them via other cryptocurrencies, we can pack them on commodities or securities, or we can pack them on currencies, a basket of currencies, or only one currency.

18:32If we look at the stablecoin market these days, we have 99% of stablecoins which are pegged, want to want to the USD. So if I look at 99% of the stablecoins which are pegged on the USD, I would say that these stablecoins are not very volatile, they are relatively stable, and we can use them as a store value and as a payment for some objects. So I would see them as money but privately issued, they are not issued by you, they are issued by private entities, private companies. When you talk to investors and you talk mostly to institutional investors, where do they see Bitcoin fitting into their portfolios? Is it something that is treated like risky, like oh, it might go up, it might not, is it treated as something that is not correlated, like how would you say they approach it?

19:33I'm talking to companies on the sell side, by side, every day, and the way they are seeing Bitcoin, so you have two types of investors, those who don't like Bitcoin, because it's based on nothing that don't believe in the long term, they will never invest in cryptocurrencies and they will never invest in Bitcoin, and there are those investors, especially I would say the younger generations of investors, who see some potential to invest in cryptocurrencies, not all cryptocurrencies, but I would say when I look at the big buy side managers, they mostly invest in the top 10 cryptocurrencies, and most of them are seeing some long-term potential in that, even if they are backed by nothing again, and they tend to invest between

20:36two to five percent of the asset and the management. For Bitcoin to have a long-term potential value, does that mean that it would need to actually move from being an asset as you've described it to being a currency? It depends to who you talk to. If you talk to CFO, Strasurers, the more traditional industry, the way they are seeing cryptocurrencies is more like a different asset class, which is traded, they don't see Bitcoin as a currency, they don't see Bitcoin as gold or digital gold, but the way they see it is more as an asset, which is maturing over time, but it takes time, and it takes more time than most people have anticipated. If I look at this big picture market cap, because I keep hearing that the market cap has been declining a lot and significant, which is absolutely true, but if we look at what happened

21:37since 2023, prices doubled in 2024, doubled again in 2025, and now we are still at the time we are around 67,000, which is still huge compared to where we were in 2020, by the way. You've tracked ETFs as well, obviously you mentioned that the launch of Bitcoin ETFs, it's a tradeable, easy to buy ETFs here in the United States, as a big moment for Bitcoin. I remember the run up to that and the price action that we saw, and the flows were pretty significant, but you've also been tracking some outflows from those ETFs of late. Would you say that that's kind of an echo of the pricing in Bitcoin, or could that possibly be a driver as retail investors maybe reallocate a little bit? I think it's probably both.

22:39What I found pretty interesting, because we keep mentioning Bitcoin, but actually, if I look at the payment industry, and again, we've just said that Bitcoin is not a mean of payment, but if I look at what happened in the payment industry, it's quite similar to what happened for Bitcoin. During COVID, everyone was on the payment industry because payment was becoming more digital, and Bitcoin search as well at that time, and what we are seeing over the past six months and so on, it's a big decline in terms of payment stock as well, which is quite similar to what is going on for digital assets as well. Of course, we're looking at disruptions in all kinds of industries right now from AI, and to some extent that applies to payments as well, you know, will agents be doing all of our buying, and so you don't need to use your credit card, et cetera. What I wonder, too, do you think that there's an element of stablecoin kind of disruption to payments that's driving some of the weakness in payments stocks?

23:42Because I did notice that actually, I'm just checking the action now, so Circle, which is a US company that issues one of the largest stablecoins USDC, their stock has actually done pretty well this year. It's been up and down a little bit, but after their most recent earnings report, it seemed like investors were really excited about sort of the growth of stablecoins in payments. And so do you think that, to some extent, the decline we've seen in most payment stocks is part of that being driven by excitement about stablecoins kind of coming into the mainstream and disrupting some of those companies? I wouldn't say that's the key reason, but it might be part of the reason as well, because when I look at stablecoin, I mean, it's used to be a huge topic, and it's still a huge topic, by the way, but again, stablecoins, when we look at the numbers and the use cases, we have over 80% of stablecoins which are used for crypto trading, so it's not payment,

24:46it's for crypto trading. But in terms of transactions, I mean, we have a record number of transactions, but now if I look at the retail payment, it's only 2% of the transactions that we have for stable coins. So it's still a small amount. I'm glad you brought up that the role that crypto trading plays in stablecoins, because I think so far that's been part of the driver of the growth of stablecoins, which did increase in value pretty significantly last year, USDC, circle stablecoin, I think the circulation increased 70% plus in 2025. How much of the big increase in stablecoin usage has been driven by the increase in price of Bitcoin that surged to over 100,000 last year? And do you think that some of the air might come out of stablecoins if cryptocurrencies like Bitcoin kind of don't, if there's a long winter, as people say, for those prices? Do you think that that could sort of restrain the growth of stablecoins, where we starting to see stablecoins kind of have a little bit of their own momentum?

25:49Do you think that 2% of payments you mentioned maybe becomes 3, 4, and starts to drive it? I think it's kind of both, because with the way I see the genus arcs, so the genus arcs clearly emphasize stablecoin size of middle payments, which should be a catalyser, by the way, for the industry, as a middle of payment. Having said that, yes, we still have over 80% of the transactions which are to invest in crypto, so it's still a huge share. But more and more companies are looking to adopt stablecoins and thinking about Walmart and thinking about Amazon. We have many announcements these days of companies trying to include the stablecoin solutions. We had Swiss as well, which is working on the solution as well. So I already see the genus arcs, by the way, as a genus idea, because the US decided to advance the genus arcs, probably because 99% of stablecoins are paid to the USD.

26:53So it's, and most emerging economies are using stablecoins. So it's mostly the emerging economies which are using stablecoin these days. We don't have a lot of just cases in Europe and not much in the US. Do you think investors should think differently about stablecoins and Bitcoin? That maybe in their minds, they kind of think of them all as part of crypto and maybe they're high on crypto or low on crypto. But do you think it's at this point enough reason for an investor to say, you know what? Okay, maybe the price of Bitcoin will go down. Maybe it will kind of stay here for a long time. But I can be bullish about stablecoins. Do you think that someone can separate those things in their mind as an investor? I think we should. First of all, because stablecoins, I mean, those who are paid to the dollar, they are brought to stable. So you don't invest in a stablecoin for profit because they should be more or less stable.

27:53And the way I turn to see stablecoins is, again, a stablecoin is privately issued currency, which can be used as a mean of payment. So very different, the way I see Bitcoin, again, it's a crypto asset where you can believe in price increase or you can say that it's based on nothing, the value is based on wishful thinking because when we look at this, at the value of Bitcoin, I still think part of the valuations we had, especially end of last year when we were around $120,000, it was based on some fundamental factors, and it was also partly based on wishful thinking. The fact that people still expect the price to be higher, they continue to increase the

28:53exposure to Bitcoin, but it's based on nothing. It's a speculative way of seeing Bitcoin. All right. Well, we're going to take a quick break. When we come back, we're going to have one more question for Mary and Labore of Deutsche Bank. The Take on the Week podcast is brought to you by Invesco QQQ. There are risks when investing in ETFs, including possible loss of money. ETFs' risks are similar to those of stocks. Investments in the tech sector are subject to greater risk and more volatility than more diversified investments. The NASDAQ 100 Index includes the 100 largest non-financial companies listed on the NASDAQ. An investment cannot be made directly into an index. Before investing, consider the funds' investment objectives, risks, charges, and expenses. Visit Invesco.com for a prospectus containing this information. Read it carefully before investing. Invesco Distributors Inc. Welcome back, Marion.

29:55So there are some new laws that you mentioned earlier, including the Clarity Act. Do you think that laws like that will help bring the crypto winter that we're experiencing to an end? At some point, I would say it was kind of the Wild West. And we had more and more clarity set until in Europe, Micah was implemented in 2024. So in Europe, Micah is covering most digital assets. In the US, the Genius Act was, I would say, the first legislation that the US agreed on, but it was purely an only covering stablecoin. So the Clarity Act is covering digital currencies, which is needed and expected to have a positive impact on the industry. And yes, on regulation, I mean, when you look at the traditional banking sector,

30:57they are heavily regulated. So to have a clear framework, a clear regulatory framework will certainly lead to more clarity and will probably drive adoption. Marion, thanks so much for joining us. We had a pretty wide-ranging discussion about the crypto verse there. And I know that's something that there's a lot of mystery, but also a lot of interest in with investors. So thanks for taking the time to walk us through it. Thank you very much for the pleasure to show you. And that's everything you need to know to take on your week. The show is produced by Anthony Bansy and Michael Laval, special thanks to George Downs and Daniel Bach. Michael Laval is our sound designer. He also wrote our theme music. Aisha All-Mousleem is our development producer. Chris Sinsley is our deputy editor. And Feline Patterson is the head of news audio for the Wall Street Journal. For even more, head to WSJ.com. I'm Miriam Gottfried. And I'm Tellus Demos.

31:58Until next time. The Take on the Week podcast is brought to you by InvescoQQQ. There are risks when investing in ETFs, including possible loss of money. ETFs risks are similar to those of stocks. Investments in the tech sector are subject to greater risk and more volatility than more diversified investments. The NASDAQ 100 Index includes the 100 largest non-financial companies listed on the NASDAQ. An investment cannot be made directly into an index. Before investing, consider the funds investment objectives, risks, charges, and expenses. Visit Invesco.com for a prospectus containing this information. Read it carefully before investing. Invesco Distributors Inc.