Bitcoin-to-Gold Ratio: A Closer Look

During the span from December 2024 to the end of 2025, the Bitcoin-to-gold ratio shifted from 40 to 20 ounces per BTC. This change was primarily driven by gold’s robust performance, fueled by sustained inflows as central banks accumulated 254 tonnes of gold by October, while global gold ETF holdings rose by 397 tonnes in the first half of 2025.

In contrast, Bitcoin demand softened in the latter half of the year. Spot ETFs’ assets under management (AUM) fell from $152 billion to $112 billion, and long-term holders sold over 500,000 BTC. This divergence highlights the broader macroeconomic dynamics influencing each asset.

Why Gold Outperformed Bitcoin in 2025

Gold emerged as the preferred store-of-value asset in 2025, boasting a year-to-date (YTD) gain of 63% and surpassing $4,000 per ounce by the fourth quarter. This rally was notable as it occurred despite restrictive monetary conditions, with US interest rates remaining high until the Federal Reserve’s first rate cut in September.

Central banks were pivotal in this movement, with global purchases totaling 254 tonnes by October. The National Bank of Poland led this trend, adding 83 tonnes. Additionally, global gold ETFs saw significant growth, reaching a record high of 3,932 tonnes by November 2025.

Despite real yields averaging 1.8% across developed markets during the second quarter, gold’s appeal remained strong, with a 23% rally. This signaled a decoupling from its traditional inverse relationship with yields. Elevated geopolitical uncertainties further bolstered gold’s allure, as reflected in the increased volatility index (VIX) and geopolitical risk indexes.

Bitcoin’s Relative Underperformance

While Bitcoin did achieve six-figure returns in 2025, its performance paled in comparison to gold’s. The initial momentum in spot Bitcoin ETFs saw AUM rise from $120 billion in January to $152 billion by July. However, this momentum waned, with AUM dropping to $112 billion due to net outflows and reduced fresh capital influx.

On-chain data revealed significant distribution, with long-term holders realizing over $1 billion in profits daily during July, marking a major profit-taking phase. By October, long-term holders sold around 300,000 BTC, leading to a decrease in supply from 14.8 million BTC in July to approximately 14.3 million BTC.

High real yields throughout 2025 increased the opportunity cost of holding Bitcoin. In contrast, gold benefited from safe-haven status and reserve-driven demand. This divergence explains the compression in the Bitcoin-to-gold ratio, indicative of a cyclical repricing rather than a breakdown in Bitcoin’s long-term potential.

This analysis does not provide investment advice. Readers should conduct their own research before making investment decisions.

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