Bitcoin-to-Gold Ratio Plummets 50% as Gold Breaks $4,000 in 2025

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  • In 2025, gold outpaced Bitcoin, slashing the BTC-to-gold ratio by half from 40 to 20 ounces per BTC.

  • Gold saw strong gains due to central bank purchases and ETF inflows, against a backdrop of global uncertainty.

  • Bitcoin, while achieving solid returns, experienced weakened demand in the latter half of the year, contrasting gold's consistent attractiveness.

Gold Trumps Bitcoin as 2025's Safe-Haven Asset

In 2025, gold emerged as the dominant store-of-value asset, outperforming Bitcoin significantly and halving the Bitcoin-to-gold ratio from 40 to 20 ounces per BTC. This decline was less about faltering Bitcoin demand and more about gold's substantial appreciation, driven by unprecedented macroeconomic conditions. Gold's allure was bolstered by central bank purchases totaling 254 tonnes by October and a sharp increase in global gold ETF holdings by 397 tonnes in the first half of the year.

Gold's Exceptional Performance

Gold's value surged by 63% year-to-date, surpassing $4,000 per ounce in the last quarter. This rally defied restrictive monetary policies as US interest rates remained high, with the Federal Reserve only starting to cut rates in September. Central banks played a pivotal role, with the National Bank of Poland accounting for 83 tonnes of gold acquisitions. Furthermore, geopolitical tensions pushed the Volatility Index (VIX) to an average of 18.2, and global uncertainty attracted investors seeking portfolio insurance, reinforcing gold's robust position.

Bitcoin's Struggle to Keep Pace

Despite substantial appreciation, Bitcoin lagged behind gold, experiencing a downward trajectory in demand particularly in the latter half of 2025. The initial surge in Bitcoin ETF assets under management reached $152 billion by July but then dwindled to $112 billion by November due to net outflows. Additionally, long-term holders offloaded over 500,000 BTC, signifying the largest distribution phase since late 2024. Elevated real yields and a high correlation with equities increased Bitcoin's opportunity costs, contrasting with gold's safe-haven and reserve appeal.

In sum, gold's dominance in 2025 was driven by its appeal as portfolio insurance amid economic unpredictability, raising questions about whether Bitcoin will reclaim its comparative value in 2026.

Read more

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  • Gold remains bid as lack of Fed clarity and geopolitical frictions persist
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