The conclusion of the gold rush in October 2025
Following a notable rally that pushed gold prices beyond $4,300 per ounce, the metal achieved a historical peak driven by robust safe-haven demand. By October 2025, the market started to see profit-taking.
On Oct. 17, 2025, gold prices dropped by over 2% shortly after hitting the peak. As of now, spot gold traded around $4,023 per ounce, reflecting an 8.1% decrease from the all-time high of $4,378.69.
The main catalyst for this decline was the easing of US-China trade tensions following President Donald Trump’s remarks about the unsustainability of maintaining full-scale tariffs on China. Additionally, a stronger US dollar and renewed interest from investors in higher-yield assets like Bitcoin (BTC) contributed to the correction.
Interesting fact: The term “digital gold” became popular as Bitcoin’s scarcity and independence began to echo gold’s role as an inflation hedge.
The cycle of gold: Peaks and crashes
Gold’s journey has been marked by significant surges and swift declines, influenced by inflation, interest rates, and geopolitical occurrences. From its early-1980s zenith to the steep drop post-2013 and the vigorous rise in the 2020s before the October 2025 dip, the gold market has seen many fluctuations.
1980-1999 decline: After a rapid price increase stemming from high inflation and geopolitical strife, gold peaked in January 1980 at nearly $850 per ounce. This rally ended with the “Volcker Shock,” during which Federal Reserve Chair Paul Volcker aggressively raised interest rates. Between 1980 and 1982, the Fed pushed the federal funds rate above 20% to rein in inflation, resulting in a severe recession. This caused a substantial sell-off, leading gold prices to tumble over 60% by 1982 and enter a prolonged bearish market. From approximately $850 per ounce in 1980, the gold price fell to about $278 per ounce by 1999.
2012-2018 downturn: After peaking in 2011, gold entered a significant downturn as the global economy stabilized and equities thrived, diminishing gold’s investment appeal. In 2013, the US Federal Reserve began tapering its quantitative easing, strengthening the US dollar and redirecting capital toward higher-yielding assets, further pressuring gold prices. The SPDR Gold Trust, a major gold-backed ETF, witnessed over 30% of its holdings withdrawn, indicating dwindling investor interest. Between 2014 and 2018, gold fluctuated between $1,200-$1,400 per ounce, down from roughly $1,680 in 2012.
2020s: The 2020s restored gold’s reputation as a safe-haven asset amidst global uncertainty. As COVID-19 halted economies, governments worldwide deployed over $10 trillion in stimulus, igniting inflation concerns. By 2022, US inflation surpassed 9%, reinforcing gold’s status as a financial safeguard. Central banks also ramped up purchasing, adding around 1,000 metric tons of gold annually between 2022 and 2024. Even with rising interest rates, gold prices ascended from approximately $1,785 in 2020 to over $3,200 by early 2025.
The October 2025 gold crash, however, has left investors exploring alternatives like Bitcoin (BTC), which remains somewhat insulated from government and central bank policies.
The flow of money into Bitcoin
The narrative of digital gold has significantly strengthened, with younger investors increasingly recognizing Bitcoin as a contemporary hedge against inflation and currency devaluation. Many now perceive Bitcoin as more accessible and innovative than traditional bullion, boosting its market capitalization from $134 billion in 2019 to over $2.4 trillion by the first half of 2025.
Spot Bitcoin ETFs and ETPs have provided institutional-level access, luring billions in regulated flows. In early October 2025, US spot Bitcoin ETFs recorded a record $3.55 billion in weekly inflows, spearheaded by BlackRock’s iShares Bitcoin Trust (IBIT), which contributed to pushing BTC past $126,000. Concurrently, gold ETFs endured outflows exceeding $2.8 billion in recent weeks, emphasizing the disparity between Bitcoin’s momentum and gold’s.
Historically, gold outflows and Bitcoin inflows exhibit an inverse correlation, with Bitcoin’s correlation to gold declining to -0.3 during risk-on sentiment periods. Exchange balances have plummeted to a six-year low of 2.83 million BTC, indicating diminished selling pressure.
$200,000 Bitcoin: Is it attainable?
Bitcoin’s trajectory toward $200,000 appears supported by strong market and macroeconomic factors. The April 2024 halving reduced block rewards, tightening supply as demand steadily increases.
As global debt consistently rises, Bitcoin’s attractiveness as a decentralized investment asset grows. By the first half of 2025, global debt had reached nearly $338 trillion — around 235% of global GDP.
Institutional factors driving Bitcoin adoption are gaining traction. As of Oct. 24, 2025, Strategy (MSTR) possessed 640,418 BTC, followed by Marathon Digital Holdings (MARA) and Celsius (CEP) with 53,250 and 43,514 BTC, respectively.
A potential move by the US Federal Reserve to relax monetary policy could further bolster Bitcoin’s growth. The $200,000 threshold acts as a powerful psychological milestone, encouraging investors to pivot away from assets like gold, which has recently seen $2.8 billion withdrawn from its ETFs.
Interesting fact: Gold has maintained its status as a value store for over 5,000 years, while Bitcoin has achieved similar recognition in just over a decade.
Capital migration from gold to Bitcoin
Capital flowing from gold to Bitcoin has frequently characterized major market cycles, illustrating the evolution of investor preferences. Key cycles include:
2013-2017: Between 2013 and 2017, gold prices remained relatively static between $1,200 and $1,400 per ounce following the 2011 peak, whereas Bitcoin skyrocketed from $100 to $20,000. This rally was bolstered by retail investors seeking a decentralized alternative to fiat currency.
2020-2021: From 2020 to 2021, institutional adoption propelled Bitcoin to $69,000, as pandemic-era stimulus and inflation concerns led firms like MicroStrategy to prefer BTC over gold. Traditionally, gold attracts conservative investors during stable times, but during risk-on periods, Bitcoin tends to lure capital with its scarcity and potential for growth.
Recent patterns reinforce this transition. Bitcoin ETFs registered $3.55 billion in weekly inflows in October 2025, while gold ETFs encountered $2.8 billion in outflows. These trends underscore a generational shift towards digital assets amid ongoing global uncertainty.
Interesting fact: Gold’s supply increases by about 1% annually, while Bitcoin’s supply growth is halved every four years, creating escalating scarcity that enhances its long-term value narrative.
Challenges facing Bitcoin’s rise to $200,000
While crypto proponents anticipate Bitcoin reaching $200,000, the journey is fraught with challenges. These include volatility, regulatory uncertainties, the potential resurgence of gold, and competition from other assets:
Bitcoin’s volatility: Like all cryptocurrencies, Bitcoin is subject to high volatility, with sharp price increases and declines. Institutional purchases can instigate price surges, while large holders (“whales”) selling their Bitcoin might induce sudden drops.
Regulatory uncertainties: In various regions, Bitcoin regulation is still evolving. Continuous uncertainty surrounding taxation and compliance may discourage institutional involvement.
Gold’s potential revival: In October 2025, some investors who had seen substantial gains began withdrawing funds from gold miner ETFs. Meanwhile, crypto ETFs reported unprecedented inflows of $5.95 billion globally during the third week of October 2025, as per Reuters. Strong demand for crypto assets contributed to Bitcoin reaching an all-time high. Nonetheless, as a safe-haven asset, gold could still stage a comeback.
Competition: Equities, which generally yield around 10% annually, compete with digital assets. Tokenized treasuries and central bank digital currencies (CBDCs) also present stable alternatives, potentially diverting investments from Bitcoin.
A generational shift in value stores
A generational transformation is redefining perceptions of store-of-value assets. Younger investors, shaped by the digital age, are increasingly attracted to Bitcoin for its decentralized, borderless nature and potential for substantial returns.
In contrast, older generations continue to prefer gold for its tangible nature and established stability. The accelerating digitization of finance is hastening this transition, as blockchain technology supersedes sluggish, paper-based systems with more transparent and efficient alternatives.
However, gold and Bitcoin could coexist over time within a dual-hedge model. Gold offers reliability through its physical scarcity and historical credibility, while Bitcoin offers growth through its limited supply and digital flexibility. Together, they create a balance between tradition and innovation, reflecting how investors are adapting to an ever-complicated financial landscape.
