Obviously, the title is absurd. Bitcoin does have something to do with chains, but it is not used for manufacturing jewelry. That is especially relevant here, because gold is. And demand for gold jewelry typically tanks right when demand for investment gold rises. If you want to hedge against economic uncertainties by investing in gold, know that people have less money for expensive chains and rings in that period — exactly because of the economic uncertainties. And that makes your hedging position less efficient. But to what extent?
Well, considerably. The jewelry industry accounts for about half of the demand in physical gold, which can fall significantly during times of crisis. As an example, yearly demand shrunk by one-fifth in 2009, with a great part of it coming from China and India. Growth in these countries was somewhat thrown back by the depression, but it remained positive all along. Their standards of living kept rising. Unlike now.
China and India enacted strict curfews this year, which also dealt a massive blow to both economies, and pushed growth rates well into negative territory. Jewelry season is off for a good while, both there and globally. Recent data from the World Gold Council shows that gold demand from the jewelry industry fell 39% year-on-year in Q1 2020. This was by far the lowest in the previous 10 years, and the current quarter will probably not be much better. Gold appreciated despite all this, thanks to the surging demand for investment gold. However, the reaction of the price would have been much more intense without the setbacks in the jewelry industry.
Bitcoin is a special asset in the sense that the jewelry industry is absent from its demand side. Amid chaos or inflation, it fulfills the safe haven asset role much more explicitly than gold does. For example, we can expect its price to be more sensitive to fears of long-term inflation that appear in the wake of renewed limitless money printing. Remember though that this effect cuts both ways. Once uncertainties are over, the returning demand for jewelry could support gold, while that kind of support would be missing from bitcoin. But all things considered, we can agree that in a certain sense digital gold is more gold-like than gold itself.