London Daily

Focus on the big picture.
Thursday, Oct 29, 2026

Bitcoin or gold? Which is best buffer against inflation as crypto hits record high

Bitcoin or gold? Which is best buffer against inflation as crypto hits record high

BITCOIN hit a fresh high today, nudging $67000 after another dizzying rally which has seen the world’s most popular cryptocurrency more than double in price in three months.

The breakneck turnaround from July’s sub-$30000 low has revived talk in some quarters of crypto’s potential as a better hedge against global fears of rising inflation than gold.

A 10% rally this week, which paused for breath this afternoon, has been put down to the launch of a new fund in the US - the ProShares Bitcoin Strategy ETF - which offers exposure to the crypto without some of the risks of actually holding it.

The parallel with gold goes further: 20 years ago the first tradeable fund backed by gold was launched by Gold Bullion Securities.

A natural gas generator powering a bitcoin mining data centre on an oil field in North Texas

Now, the World Gold Council calculates the gold-backed ETF market to be worth $201 billion, because it’s much easier to hold an ETF in your portfolio, pension or ISA, than it is a gold bar.


On this week’s prices, however, Bitcoin looks a shoe-in as a safe haven over bullion which has failed to keep pace with rising fears around the world that inflation is out of control.

The price of gold is down 6.1% this year to $1780 an ounce .

It means one Bitcoin is worth 38 ounces of gold - just over a kilogram. A year ago, it was worth 5oz.

But before you start melting down your wedding ring there are few things to consider.

Investors are feeling the FOMO effect


Laith Khalaf, head of investment analysis at AJ Bell, said: “The prospect of new ETFs offering access to Bitcoin is potentially powerful.

“However that is offset by the fact that it’s already relatively easy for retail investors to buy and hold crypto.

“If the ProShares launch sparks a flood of other providers to enter the ETF market, that should be positive for Bitcoin demand.”

But while the price of Bitcoin has sizzled since July, the issues which prompted the crash from May’s previous highs around $64000 remain.

Tesla CEO and maverick crypto advocate Elon Musk pulled back in April, citing environmental concerns over the carbon footprint from the vast amounts of power needed to compute - or ‘mine’ - new coins.

And other companies are also feeling the breath of increasingly ESG-savvy investors down their necks.

Elon, for or against?


Khalaf added: “Companies won’t want to facilitate crypto payments if it impinges on their green credentials, particularly when transactions can already be quite easily fulfilled using dollars, euros or pounds.”

The crypto market has a long way to crawl


The issues of looming regulation and arbitrary intervention are also difficult to ignore.

China’s clampdown on crypto was generally blamed for the summer sell-off.

In the UK, regulator the FCA has banned the sale of crypto derivatives and Exchange Traded Notes to retail investors due to the complexity and extreme volatility of the underlying asset. Until the market matures that is unlikely to change.

That volatility has been reflected in the ProShares ETF today. After rallying at its launch - amassing $1.1billion in the second busiest ETF debut on record - it slipped back 2.5%.


Susannah Streeter at Hargreaves Lansdown said: “The FCA has been nervous about the number of retail investors risking their money in the crypto sphere for some time. It’s now worried the volatile nature of the coins and tokens could blow up in the face of the financial sector with more institutions piling in..

“UK Regulators appear to be holding fire right now as proposals to set up at central bank digital currency known as BritCoin are investigated and assessments made about the impact on the commercial banking system.

“Giving crypto assets a high-risk price tag may help limit contagion if they sharply fall in value, but central banks and regulators are on a tricky tightrope. If new rules are too strict, they risk quashing innovation in the rapidly developing decentralised finance world.

“If investors are feeling the FOMO effect, they should only dabble with crypto currencies at the edges of their portfolios with money they can afford to lose.”

Khalaf adds: “The crypto market is still in its infancy, and has a long way to crawl before it becomes mainstream.

“The launch of the ProShares ETF is a positive development for Bitcoin, but the longer term adoption of cryptocurrencies by businesses, consumers and regulators is much more important to long term returns, and all remain deeply uncertain.

“As such, consumers should only invest money in crypto they are willing to lose in its entirety.”

The warning was echoed in a note from Nicholas Colas, of DataTrek Research.

“This asset tends to peak around flashy events. Our recommended approach is to scale in slowly, over a period of months or years, rather than chasing it when it becomes frothy,” he wrote, adding: “Be careful.”

Newsletter

Related Articles

0:00
0:00
Close
Met Office Issues Extended Forecast Highlighting Stable High Pressure Weather Patterns Across the United Kingdom
Scottish Finance Secretary Shona Robison Outlines Changes to Tax Thresholds and Residential Property Levies in Edinburgh
Financial Markets and Government Bond Yields Remain Stable Following Muted Reaction to Autumn Budget Measures
Defence Committee Chair Tan Dhesi Criticizes Budget for Delaying Critical Defence Spending Decisions to Next Year
International Monetary Fund Forecasts United Kingdom Economic Growth at One Point Three Percent for Year
Office for Budget Responsibility Assesses Fiscal Headroom Reduced to Fifteen Billion Pounds Following Global Energy Shocks
Chancellor John Healey Delivers First Autumn Budget Introducing Household Energy Support and Bank Tax Hikes
Aberdeen City Council Co-Leader Faces Binding Vote Challenge as Local Councillors Launch High Court Legal Battle
Housebuilding Across Scotland Falls to Eleven-Year Low Despite Government Declarations of a Housing Emergency
Former Prime Minister Gordon Brown Organizes National Innovation Summit in Manchester to Boost Regional Competitiveness
UK Government Faces Mounting Criticism Over Lack of Environmental Consultation During Artificial Intelligence Datacentre Expansion Talks
Greggs Announces Closure of Four Major Manufacturing Facilities Across Britain Resulting in Seven Hundred Forty Job Losses
British Retail Consortium Warns That Cumulative Employment and Regulatory Costs Threaten High Street Price Stability
Lloyds Banking Group Chief Executive Charlie Nunn Warns That Increased Bank Taxes Could Deter Long-Term Economic Investment
Ipsos Polling Reveals Seven in Ten Britons Expect Personal Tax Increases Amid Deep Public Economic Pessimism
Chancellor John Healey Delivers First Autumn Budget in Parliament Amid Tight Fiscal Constraints and Slower Growth Forecasts
United Kingdom Finance Monthly Review Highlights Rising Long-Term Borrowing Costs and Persistent Energy Price Pressures Across British Markets
Royal Marines Pioneer Rapid Autonomous Drone Operations During Major High North Exercise Involving NATO Allies
House of Commons Justice Committee Urges Chancellor to Align Prison and Courts Reform Ambitions With Concrete Budgetary Resources
Government Investigates Rapid Artificial Intelligence Datacentre Expansion Strategy Following Scrutiny Over Power Grid Demands and Planning Backlogs
His Majesty's Inspectorate of Constabulary Warns Third-Party Supplier Breaches Threaten United Kingdom Police and Fire Service Data
Number of British Businesses in Financial Distress Reaches Highest Level in Two Decades Ahead of Fiscal Announcement
Chancellor John Healey Prepares Autumn Budget Amid Intense Market Scrutiny Over Fiscal Headroom and Spending Pressures
Education or Indoctrination? The Growing Debate Over Religious Participation in British Schools
Germany's Vanishing Shopfronts: The Silent Collapse of the Businesses That Built Its Cities
Northern Ireland Executive Reaches Agreement on Public Transport Modernization and Cross-Border Rail Infrastructure Funding
Department for Energy Security and Net Zero Approves New North Sea Carbon Capture and Storage Industrial Clusters
Office for National Statistics Reports Stabilization in Private Rental Growth Across Major English and Welsh Regional Cities
United Kingdom Automotive Manufacturing Output Rises Moderately as Electric Vehicle Assembly Lines Expand in the Midlands
Competition and Markets Authority Launches Formal Inquiry Into Cloud Computing Infrastructure and Artificial Intelligence Partnerships
Scottish Government Finalizes Emergency Budget Adjustments Following Multi-Year Public Sector Funding Shortfalls
National Health Service England Announces Major Emergency Care Overhaul to Alleviate Severe Winter Capacity Pressures
Chancellor Rachel Reeves Prepares Autumn Budget Amid Intensifying Scrutiny Over Public Spending and Fiscal Rules
Bank of England Signals Cautious Approach to Further Interest Rate Cuts as Persistent Wage Growth and Inflation Pressures Remain
Transport for London Unveils Expanded Zero-Emission Bus Fleet to Meet Capital Air Quality Targets
Higher Education Institutions Face Deepening Financial Strain Amid Declining International Student Enrolment
Automotive Industry Leaders Criticize Government Tax Policies and Urge Action on Retail Consumer Confidence
Environment Agency Issues Flood Alerts Across Scottish and English Waterways Following Heavy Rainfall
Independent Audit Highlights Persistent Security Vulnerabilities Across Legacy Government Digital Portals
Northern Ireland Political Leaders Clash Over Westminster Funding Allocations Ahead of Autumn Budget
Ethnic Minorities in England Face Significant Disparities in Routine Breast Cancer Diagnosis Rates
National Police Chiefs Report Alarming Surge in Domestic Abuse Cases Fuelled by Expanding Illegal Cocaine Market
Government Announces Two Hundred and Twenty Million Pound Pothole Funding Boost for Local Highway Authorities
China Issues Formal Warning Over Potential United Kingdom Restrictions on Chinese Electric Vehicles
British Defence Ministers Sign E5 Pact to Enhance European Military Capabilities and Industrial Cooperation Within NATO
United Kingdom Business Activity Expands at Fastest Pace in Eight Months According to S&P Global Flash Survey
Chancellor John Healey Prepares Major Devolution Package and Bank Profit Surcharge Ahead of Upcoming Autumn Budget
National Health Service Consultants in England Announce Two-Day Strike Action Scheduled for November
Major Clean-Up Under Way Across Britain Following Destruction Caused by Consecutive Storms Austen and Boelo
KEY TRENDS TO WATCH
×