It's obvious: Why did gold rise while Bitcoin struggles

Market strength indicates a clear change in direction. While gold continues to rise toward a record-breaking $4,930 per ounce, Bitcoin has fallen back to $88,126—highlighting a significant gap between the two asset classes that were once correlated. This phenomenon has sparked intense debate among experts about the future of the cryptocurrency market and its once-dominant adoption narrative.

Last Thursday, precious metals experienced a sustainable rally, with gold increasing by 1.7% and silver by 3.7%. In contrast, Bitcoin—once seen as a hedge against currency weakness—failed to keep pace with the momentum. This stark contrast is evident and significant for investors awaiting clarity on market direction.

Bitcoin Adoption Narrative Losing Strength, According to Bianco Research

Jim Bianco, founder of Bianco Research, raised a critical question: is the Bitcoin adoption story over? In his analysis, announcements regarding BTC adoption are no longer effective in driving price momentum. “The adoption messaging is no longer working,” he said. “A new theme is needed, and it’s not yet clear where it will come from.”

This sentiment reflects the frustration of many market participants waiting for a new catalyst for Bitcoin. The adoption narrative, once a powerful force in the cryptocurrency’s bull run, now appears exhausted as a price driver.

14 Months of Bitcoin Underperformance Against Other Assets

To illustrate his point, Bianco used a detailed historical comparison. Over the 14 months since President Trump’s victory in November 2024, Bitcoin has only increased by 2.6%. During the same period, silver rose by 205%, gold by 83%, the Nasdaq by 24%, and the S&P 500 by 17.6%.

This data clearly shows how far Bitcoin has fallen behind other asset classes. “While we wait for a new theme, everything else is moving quickly while BTC remains stagnant,” Bianco remarked.

This sharp underperformance exceeds normal market volatility—it suggests deeper structural changes in market dynamics.

Balchunas: Bitcoin Consolidation Is Normal in a Long Cycle

Eric Balchunas, senior ETF analyst at Bloomberg, offers a counterpoint worth considering. He states that Bitcoin has merely been consolidating after a massive bull run. From a low of $16,000 in winter 2022 to an all-time high of $126,000 in October, Bitcoin has risen nearly 300% in just 20 months.

“Are you expecting 200% returns every year without correction?” Balchunas asked, emphasizing the importance of perspective on market cycles. In his view, the current consolidation phase is a natural part of market rhythm.

Additionally, Bitcoin’s weak performance may be partially explained by the “silent IPO” phenomenon—where early long-term investors take profits after holding for over a decade. One prominent example is the transfer of over $9 billion worth of Bitcoin in July this year by a long-term holder who had held it for more than ten years.

The Real Reason: USD Weakness and Risk Asset Repricing

A clear factor many have overlooked is Bitcoin’s relationship with the US dollar. In an unusual way, Bitcoin has not risen as the USD value declined. According to JPMorgan strategists, the current dollar weakness is driven by temporary flows and sentiment, not by fundamental changes in economic growth or monetary policy expectations.

As a result, JPMorgan predicts the USD will remain stable as the US economy grows. This has direct implications for Bitcoin: since the market is not currently viewing the ongoing USD weakness as a long-term macro shift, Bitcoin is being re-priced more as a liquidity-sensitive risk asset rather than a USD hedge.

This realization signals a shift in investor appetite—gold and emerging markets have become the preferred beneficiaries of USD diversification at present.

Pudgy Penguins and the New Web3 Narrative Beyond Bitcoin

While Bitcoin’s struggle dominates headlines, other layers of the crypto ecosystem are gaining momentum. Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, transforming from speculative “digital luxury goods” into a multi-vertical consumer IP platform.

Pudgy Penguins’ strategy is clearly focused on user acquisition through mainstream channels—toys, retail partnerships, and viral media—before onboarding into Web3 via games, NFTs, and the PENGU token. The ecosystem has already reached physical-digital products with over $13M in retail sales, more than 1 million units sold, games with over 500,000 downloads in just two weeks, and a widely distributed token across 6 million+ wallets.

This case suggests that while Bitcoin consolidates, innovation and growth continue elsewhere in the crypto landscape—an important point for investors seeking new opportunities.

The Crypto Market at a Crossroads

The divergence between Bitcoin and gold is not just a technical phenomenon—it clearly reflects evolving market sentiment and capital reallocation. Bianco’s point about the need for a new narrative for Bitcoin is valid, but Balchunas’ perspective on long-term consolidation is equally compelling.

The market is sending a clear message: the adoption narrative has become stale, USD weakness is temporary, and opportunities are scattered across different crypto assets and traditional alternatives. Investors looking to thrive in this environment need nuance, diversification, and strategic flexibility.

As the narrative continues to evolve, one thing is certain: the significant Bitcoin rally from 2022 has created space for consolidation, and this pause will open the door for a new cycle once the market is ready.