By Brett Munster
When Gold Leads and Bitcoin Lags
Over the past several months, precious metals have taken center stage in global macro markets. Gold and silver have both posted strong gains, while bitcoin—after reaching a new all-time high in October 2025—has undergone a sharp correction. This divergence has reignited skepticism around bitcoin’s “digital gold” narrative. If gold is acting as a safe haven and preserving purchasing power during periods of uncertainty, shouldn’t bitcoin be doing the same? Given recent price action—including a sharp sell-off in bitcoin last week—the question is understandable. Yet it reflects a short-term view that overlooks both historical precedent and the deeper forces shaping these markets. A broader perspective shows that this divergence fits well within established patterns, and that longer-term trends continue to support bitcoin’s store-of-value thesis.
Since bitcoin’s peak on October 6, 2025, at roughly $126,000, gold has significantly outperformed. From that date, gold climbed to new highs above $5,000 per ounce and is still up roughly 25% despite a modest pullback. Silver’s performance over the same period has been even more dramatic, up approximately 60% from early October levels. Bitcoin, by contrast, is now down roughly 45% from its all-time high, following a steep drawdown last week before stabilizing. This dynamic—precious metals surging while bitcoin struggles—has been widely interpreted as a challenge to the digital-gold narrative.
It is crucial, however, to place this performance gap in its proper context. Bitcoin’s pronounced underperformance relative to gold and silver is largely confined to the past four months, a narrow window within a much longer market cycle. From the start of 2025 through early October, bitcoin broadly tracked gold’s performance. A few months of divergence, even when punctuated by a sharp weekly sell-off, do not meaningfully redefine an asset’s long-term role.
The concept of a store of value is inherently long term. It refers to assets that preserve purchasing power over years or decades, not over a single quarter. When viewed through that lens, bitcoin’s record remains compelling. Even after the recent correction, bitcoin’s cumulative gains over multi-year horizons far exceed those of gold. Since the start of the pandemic, gold is up roughly 3x, while bitcoin is up 8.2x even with this recent correction. Over the past decade, gold has risen around 4.4x, whereas bitcoin has appreciated by more than 186x. Short-term underperformance does not negate years of demonstrated outperformance or invalidate the broader thesis.
In fact, the recent surge in gold arguably strengthens the case for bitcoin rather than undermining it. Gold’s rally is signaling rising stress in the global monetary system—concerns around sovereign debt, fiscal sustainability, and the long-term credibility of fiat currencies. Historically, gold performs best when confidence in monetary, fiscal, or geopolitical stability deteriorates. These themes—the debasement of currency, US government debt spiral, and rising hurdle rates —have been recurring subjects in this newsletter. Gold investors and bitcoin proponents ultimately share the same core concern: preserving purchasing power in a world of expanding debt and monetary dilution. They simply express that view through different assets.
Bitcoin builds on gold’s foundational properties while improving on many of its limitations. Like gold, it is a scarce, bearer asset that exists independently of any fiat currency system. Unlike gold, it is natively digital, easily transportable, globally accessible 24/7, simple to verify, and much harder to confiscate. It can be sent across the world almost instantly, and its network can monetize otherwise wasted or stranded energy. Most importantly, while gold’s scarcity is relative and its supply issuance responds to price incentives—bitcoin’s scarcity is absolute. Its supply is capped, its issuance schedule is fixed, and its rate of new supply creation is already lower than that of gold, with no mechanism for change.
That said, gold retains advantages that should not be dismissed. Time and familiarity matter. Gold has served as a monetary asset for centuries and has been embedded in institutional reserve management for decades. Central banks, sovereign wealth funds, and pension funds are deeply accustomed to allocating to gold. Institutional comfort with bitcoin, by contrast, has only begun in recent years. As a result, during periods of rising macroeconomic anxiety, investors often turn first to established safe havens like gold, with newer alternatives such as bitcoin following later as the situation evolves.
This sequencing has clear historical precedent. During the early stages of the COVID-19 crisis in 2020, gold initially outperformed as investors rushed toward immediate liquidity and familiar hedges. Gold rose from around $1,500 per ounce in March to over $2,000 by August, a gain of roughly 33%, while bitcoin remained largely flat. Once gold’s rally matured and macro conditions stabilized, bitcoin surged, rising from about $8,500 to over $60,000 by early 2021—a gain of more than 600%.
A similar pattern appeared in 2024. From March through October, gold advanced roughly 28% while bitcoin was slightly down. From October to year-end, bitcoin rebounded sharply, rallying about 74% while gold’s price flattened. These episodes suggest a recurring rhythm: gold often leads during the initial phase of risk aversion, with bitcoin following once broader confidence and narrative clarity return.
Quantitative measures reinforce this interpretation. The bitcoin-to-gold ratio—representing how many ounces of gold are required to buy one bitcoin—captures the relative performance of the two assets. When the ratio rises, bitcoin is outperforming gold; when it falls, gold is leading. Historically, deep declines in this ratio have coincided with, or slightly preceded, major bitcoin price bottoms.
That pattern has repeated across multiple market cycles. In the 2018–2019 cycle, the ratio fell approximately 83%, declining from around 15 to 2.6 by January 2019, before bitcoin went on to nearly double over the remainder of the year. A similar dynamic played out in the following cycle: from its peak near 37, the ratio dropped roughly 76% to a low around 9 by January 2023, after which bitcoin rallied about 160% over the rest of the year. In the current cycle, the ratio peaked near 40 in December 2024 and has since declined to around 13, a drawdown of roughly 67%. While the ratio could still move lower, both the magnitude and speed of the decline suggest bitcoin is entering a zone that has historically aligned with relative bottoms versus gold. If these patterns persist, current levels suggest that in the not-too-distant future, bitcoin may begin to outperform gold.
This broader historical context matters because the store-of-value thesis cannot be evaluated through short-term price movements alone. Monetary debasement, fiscal imbalances, and geopolitical uncertainty are structural forces influencing both gold and bitcoin. Gold’s recent rally—and bitcoin’s sharp but familiar drawdown—are not contradictory signals, but a pattern that has played out before and, as underlying global monetary stress intensifies, reinforces the case for bitcoin’s role and its eventual recovery.
At the same time, bitcoin’s institutional maturation continues. Its emergence as an institutional-grade asset—underscored by the most successful ETF launch on record—signals deeper integration into traditional portfolios. Over time, this expanding infrastructure should enhance liquidity, reduce volatility, and reinforce bitcoin’s position alongside established hard assets.
Seen in this light, the recent pattern—gold rallying first while bitcoin lags—is not evidence that bitcoin’s thesis has broken. It is a historically consistent phase in a broader cycle of capital reallocation. Price-ratio dynamics, prior lead-lag relationships, and long-term performance all suggest that bitcoin’s recent weakness is not a repudiation of its store-of-value proposition, but another chapter in its evolution. Investors focused solely on short-term charts may grow skeptical when bitcoin stumbles, but history warns against becoming a prisoner of the moment. If precious metals are signaling mounting macro stress, it is more likely that gold is not stealing market share from bitcoin but expanding the total addressable market for all hard assets. And if history is any guide, the stronger gold runs, the larger bitcoin’s eventual move back up could be.
In Other News
Morgan Stanley has appointed Amy Oldenburg to its newly created digital asset strategy lead role signaling a bigger push into crypto.
The SEC confirmed that existing securities laws still apply to tokenized versions of traditional securities, regardless of issuance method.
Senate Agriculture Committee advances digital asset bill.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
BACK TO INSIGHTS