It appears that bitcoin and other cryptocurrencies are not, after all, digital gold.

So far in 2022, bitcoin prices have fallen by more than 15%. Other popular cryptocurrencies, including Ethereum, Solana, and Elon Musk’s favored dogecoin, have all plummeted this year. Meanwhile, actual gold is up over 4% and back at $1,900 per ounce, flirting with record highs of over $2,000 once more.

At a time when the Federal Reserve is actively raising interest rates, savvy investors appear to recognise that gold and other precious metals such as silver and palladium are stronger inflation hedges.

In a research earlier this month, Swissquote analyst Ipek Ozkardeskaya stated, “It is clearly evident that bitcoin trades parallel to risk assets, rather than [as] a safe haven.” “Bitcoin is still not digital gold; it appears to be more of a crypto-proxy for Nasdaq.”

The news that investment giant Fidelity will allow customers to hold bitcoin in their 401(k) retirement accounts, as well as Musk’s acquisition of Twitter (TWTR) — which some observers believe could lead to even more promotion of cryptocurrencies on the platform — were not enough to lift crypto prices out of their recent funk. Bitcoin is now trading below $40,000 for the first time.

Gold, according to many experts, still has a number of benefits over digital assets. There are growing fears that rising inflation would cause an economic slowdown, raising gold prices even further.

“Stagflation risks are mounting, and geopolitical tensions show no indications of abating anytime soon,” said Louise Street, senior markets analyst at the World Gold Council, an industry research organization. “In a stagflationary climate, where equities suffer and commodities often retreat, gold has historically been one of the best performers.”

When compared to bitcoin, equities, and other assets, analysts at the Wells Fargo Investment Institute noted in a research earlier this month that “gold can be physically held, is widely recognised, and has seen one quarter of the volatility.”

With this in mind, Wells Fargo analysts believe gold might reach $2,100 per ounce this year.

Gold is being lifted by more than simply interest rate hikes and inflation fears. In a research published late last month, Mace McCain, chief investment officer at Frost Investment Advisors, stated that gold has emerged as a safe haven in part due to concerns about Russia’s invasion of Ukraine.