Gold and silver repeatedly hit new highs. Why is Bitcoin not rising but falling instead?

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The precious metals market in 2025 is set for a frenzy. Silver broke through the $50 range in late November and then surged on a parabolic trajectory, reaching a historic high of $72 per ounce on December 24, with an annual increase of 143%. Gold hit $4,524.30 per ounce on the same day, up 70% for the year.

In stark contrast, Bitcoin was at $87,498 at the time of writing, down 8% year-to-date, from its peak of $126,000 in October, a decline of 30%.

This leaves followers of the "digital gold" narrative for Bitcoin pondering. The macro trend driving precious metals higher does not seem to be transmitting to the crypto market.

The core drivers of precious metals' rise stem from a weakening dollar, expectations of Fed rate cuts in 2026, and rising geopolitical risks—favorable conditions long anticipated by Bitcoin supporters.

However, when it comes to risk hedging, markets prefer tangible assets with a century-long reputation like gold and silver. Central banks worldwide increased gold reserves throughout the year, and retail funds shifted toward physical precious metals after Bitcoin's decline earlier in the year.

Multiple studies in 2025 confirm that gold offers more stable safe-haven performance amid macro shocks, whereas Bitcoin is often a high-beta risk asset, positively correlated with stocks, and did not lead in this round of trading.

Structural demand differences further widen the gap. Silver's rise is not only driven by safe-haven demand but also benefits from record industrial demand in sectors like photovoltaics and electronics. Supply chain shortages and scarce substitutes have intensified supply tightness, providing macro and industrial support.

Bitcoin, lacking industrial use, sees demand concentrated in financial speculation and on-chain settlement, with no physical demand buffer. This asymmetry means that even if rate hikes pause and risk appetite cools, silver still has industrial demand to support it, while Bitcoin can only rely on ETF inflows to absorb selling pressure. Once capital flows turn negative, its support weakens.

Silver's surge acts as a macro barometer rather than a trading signal. It reflects market pricing of low real interest rates and a weak dollar but also highlights that Bitcoin has yet to integrate into the hard asset trading system.

To reverse its downward trend, Bitcoin needs clearer regulation to encourage institutional reallocation, retail sentiment recovery, or for its features like censorship resistance and programmability to demonstrate value amid macro shocks.

Caution is warranted: silver is becoming relatively crowded, and a hawkish shift by the Fed could trigger asset volatility, indirectly impacting Bitcoin.

The divergence in 2025 proves that "hard assets" still cannot be directly linked to Bitcoin. Silver combines industrial demand with institutional credibility, gold has institutional credibility and narrative momentum, while Bitcoin is still seeking institutional acceptance and will never possess industrial attributes.

This does not negate Bitcoin's value; rather, its outperformance requires additional conditions. Once those are met, its upside potential could surpass that of precious metals.

Before that, we must recognize that macroeconomic positives have yet to stimulate the crypto market, and Bitcoin still has a long way to go before becoming a true hard asset.