As gold surges sharply, Bitcoin's decline accelerates market polarization

In recent months, a clear divergence has become evident between the gold and cryptocurrency markets. Gold has maintained a steady upward trend, continuously hitting new highs, while Bitcoin (BTC) has shown signs of stagnation and increasing downward pressure. As investors rapidly shift their assets, the traditional story of the “rise of digital assets” is beginning to waver.

Gold Prices Hit New Records, BTC Lags Significantly

Gold has continued its steady rise in trading since January 2026, reaching a new record of $4,930 per ounce. On the most recent trading day, it rose by 1.7%, with silver also moving in tandem, increasing by 3.7% to over $96 per ounce. Meanwhile, Bitcoin’s current price is around $87,250, approximately 30% below its peak of $126,000 recorded in October 2024.

Contrasting with the resilience of precious metals, the entire crypto asset market, including BTC, is underperforming. Investors are increasingly reallocating their portfolios toward tangible assets like gold and silver, indicating a decline in the relative appeal of cryptocurrencies as digital assets.

Performance Comparison of Asset Classes Over 14 Months Reveals the Pattern

Since the U.S. presidential election in November 2024, performance data over the past 14 months highlight this market shift. During this period, Bitcoin declined by 2.6%, while silver surged by 205%, gold by 83%, the Nasdaq by 24%, and the S&P 500 by 17.6%.

These figures are symbolic. The former narrative of BTC as a “store of value” is losing credibility in the face of tangible precious metals. Bitcoin itself is increasingly treated as a high-beta risk asset, with a higher correlation to the stock market, which is undermining its position as an independent store of value.

End of Adoption Narrative or Diverging Expert Opinions

There is ongoing debate among market experts on how to interpret this situation.

Jim Bianco, head of Bianco Research, points out that announcements and discussions about Bitcoin adoption no longer have the power to move the market. He stated on social media that “the adoption narrative is no longer effective,” emphasizing that BTC’s downward trend contrasts with the simultaneous rise of gold and other assets over the same period.

In contrast, Bloomberg senior ETF analyst Eric Balchunas offers a different perspective. He notes that Bitcoin, which fell to around $16,000 during the 2022 crypto winter, has surged approximately 300% in just 20 months to reach a peak of $126,000. He comments that the current correction phase is a natural part of the growth cycle and that “expecting an uninterrupted 200% annual return is unrealistic.”

Balchunas also points out that as of November 2024, BTC had increased by 122% year-over-year, significantly outpacing gold, which he interprets as gold trying to catch up. In his view, the long-term trend still favors BTC.

Profit-taking by Early Investors Adds Pressure

Regarding the reasons behind Bitcoin’s decline, Balchunas introduces the concept of a “silent IPO.” This refers to early investors who have held Bitcoin for years and are now cashing out to realize substantial profits.

A specific example is a case where institutional investors under Galaxy Digital sold over $9 billion worth of BTC, which they had held since the Satoshi Nakamoto era, in July 2025. Such large-scale sell-offs are exerting downward pressure on the market and accelerating the decline in Bitcoin’s price.

Bianco warns that while gold is gaining attention as a new market theme, “BTC is waiting for a new narrative, but while all other assets are rapidly advancing, it remains stuck in the mud.”

The upward trend in gold is expected to continue for the foreseeable future, and market sentiment indicators suggest extreme bullishness toward precious metals. Conversely, the crypto market remains cautious, and for Bitcoin to enter a new upward phase, a new adoption story or a major market turning point will likely be necessary.