Cross-Asset Valuation — Historical Opportunities in the Bitcoin/Gold Ratio

The ratio of Bitcoin to gold (BTC/Gold Ratio) is a key indicator for measuring the value of “digital gold” relative to “physical gold.” Currently, this ratio is about 14.6 (1 BTC = 14.6 ounces of gold, based on a gold price of $4,600 per ounce). Where does this level sit in history?

Historical recap: During the peak of the 2021 bull market, the ratio reached 36 (1 BTC = 36 ounces of gold); during the low point of the 2022 bear market, the ratio fell to 8.5. Current 14.6 is slightly below the historical median. Notably, since the outbreak of the Middle East conflict, the decline in gold (-17%) has been greater than the decline in Bitcoin (-6%), yet the ratio has risen from 12 to 14.6, indicating that Bitcoin is more resilient relative to gold.

Gold–Silver Ratio and the Crypto Market: The gold–silver ratio (silver/gold) is currently about 63 (1 ounce of gold = 63 ounces of silver), higher than the historical average of 55. Silver is undervalued; if industrial demand picks up again, silver has a higher likelihood of catching up. The correlation coefficient between Bitcoin and silver is 0.65, weaker than its correlation with the Nasdaq (0.82), indicating that Bitcoin follows technology stocks more than precious metals.

Cross-Asset Arbitrage Approach: If investors are bullish on the “digital gold” narrative, they can go long Bitcoin and short gold futures to hedge macro risks; if they believe the gold–silver ratio will revert to the mean, they can go long silver and short Bitcoin. But note that cross-asset arbitrage involves high leverage, and is suitable only for professional investors.

Long-Term Outlook: If the price of Bitcoin reaches $150,000 and gold stays at $5,000, the ratio will rise to 30, approaching the historical high. This scenario requires institutions to adopt it along with a significant increase in and easing of macro liquidity.

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