The Bitcoin-to-gold ratio, showcasing the ounces of gold needed to buy one BTC, has dropped to 20 ounces per BTC, a decline of about 50% from approximately 40 ounces in December 2024. This significant change does not indicate a drop in Bitcoin (BTC) demand; rather, it reflects the peculiar macroeconomic conditions of 2025, where gold’s performance as an asset outshone that of cryptocurrency.
Key takeaways:
The BTC–gold ratio decreased from 40 to 20 ounces per BTC between December 2024 and Q4 2025.
Gold attracted ongoing investments as central banks acquired 254 tonnes by October, and global gold ETF holdings rose by 397 tonnes in H1 2025.
Demand for Bitcoin reduced in H2 as the AUM of spot ETFs dropped from $152 billion to $112 billion, while long-term holders sold over 500,000 BTC.
Why gold outperformed as a store of value in 2025
Gold was the leading store-of-value in 2025, achieving a year-to-date (YTD) growth of 63% and surpassing $4,000 per ounce in Q4. This rally was notable as it occurred amid tight monetary conditions.
The surge happened while US interest rates stayed high for most of the year, with the Federal Reserve implementing its first rate cut only in September. Typically, such conditions would pressure non-yielding assets, yet gold rose sharply, indicating a structural change in demand.
Central banks played a pivotal role in this momentum. Official global purchases totaled 254 tonnes by October, with the National Bank of Poland leading, purchasing 83 tonnes. Simultaneously, global gold exchange-traded funds (ETFs) holdings grew by 397 tonnes in H1 2025, achieving a record high of 3,932 tonnes by November.
This marked a significant reversal from the outflow pattern of 2023. The inflow occurred despite real yields averaging 1.8% across developed markets in Q2, during which gold still climbed 23%, signaling a clear decoupling from its historical inverse relationship with yields.
Heightened uncertainty further enhanced gold’s attractiveness. The VIX (Volatility Index) averaged 18.2 in 2025, up from 14.3 in 2024, as geopolitical risk indexes soared by 34% year-over-year. Gold’s equity beta reduced to negative 0.12, the lowest since 2008, confirming demand from both risk-off hedging and long-term investments.
Consequently, characterized by tight US financial environments and delayed policy adjustments, gold acted less as an inflation hedge and more as a comprehensive portfolio insurance in 2025.
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Why Bitcoin lagged behind gold comparatively
Bitcoin generated solid returns throughout 2025, reaching six-figure valuations and gaining from the demand for spot BTC ETFs. However, when compared to gold, Bitcoin underperformed as demand weakened in the latter half of the year.
Initial momentum for spot Bitcoin ETFs saw total assets under management (AUM) increase from $120 billion in January to a high of $152 billion by July 2025. Following this, AUM steadily declined to around $112 billion over the next five months, reflecting net outflows during price retreats and a slowdown in new capital influx. This was in stark contrast to the consistent inflows into gold ETFs during the same timeframe.
Onchain data indicated distribution patterns. Glassnode reported that long-term holder (LTH) profit realization exceeded $1 billion per day on a seven-day average for much of July, marking one of the most significant profit-taking periods recorded.
Although realized profits decreased in August, selling activity resumed later in the year. In October, long-term holders sold approximately 300,000 BTC, valued at $33 billion, indicating the most aggressive distribution by LTH since December 2024. Consequently, LTH supply dropped from 14.8 million BTC on July 18 to around 14.3 million BTC currently.
The elevated real yields persisted throughout most of 2025, increasing the opportunity cost of holding Bitcoin, while its correlation with equities remained relatively significant. Conversely, gold benefitted from safe-haven and reserve-driven demand. This difference in demand dynamics elucidates the compression in the BTC–gold ratio, indicating cyclical pricing shifts rather than a fundamental breakdown in Bitcoin’s long-term potential.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
