Bitcoin’s sharp rejection at $90,000 on Wednesday served as a quick reminder to investors that precious metals like gold and silver are currently the true beneficiaries of the debasement trade — not digital gold.
In October, analysts at JPMorgan indicated that both gold and bitcoin were benefiting from the so-called debasement trade. They forecasted BTC to align with gold’s trajectory, setting a price target of $165,000 for BTC based on its volatility relative to gold.
However, so far, that projection has not materialized.
While BTC is around $88,000, having declined by 30% from its peak in early October, gold is trading close to record highs, approximately $4,350 an ounce, and silver reached new all-time highs above $66, up 40% since October.
“Bitcoin enthusiasts can’t overlook the burgeoning bull market in precious metals, which is thriving,” said Charlie Morris, founder of ByteTree.
What’s causing BTC to lag?
The current weakness in Bitcoin can be traced back to its correlation with risky assets, Morris noted in a report on Wednesday. Although stock indices are hovering near all-time highs, particularly speculative sectors like data centers and AI infrastructure have experienced significant pullbacks in recent weeks.
Additionally, there is a technical aspect contributing to Bitcoin’s relative underperformance against gold. The BTC-gold ratio peaked in late 2024 and has since entered a bear market, plummeting over 50%.
In August, the BTC-gold ratio made a lower high, indicating weakening momentum, and has since declined, reaching its lowest point on Wednesday, a level it hasn’t seen in nearly two years.
Continuous selling from long-term holders has further exacerbated Bitcoin’s weakness. Research conducted by Vetle Lunde, head of research at K33, highlights a persistent decline in BTC supply held in UTXOs (unspent transaction outputs) older than two years, with approximately 1.6 million BTC reintroduced to the market since 2024. Additionally, Glassnode data indicates that long-term investors have increased selling activity.
“This showcases onchain evidence of significant, sustained selling pressure from long-term holders,” Lunde stated.
The mounting discussion around the potential risks quantum computing poses to Bitcoin’s cryptographic security also contributes to investor uncertainty, even though this concern remains largely theoretical.
Analysts suggest: Silver rally might pave the way for BTC
The bright side – no pun intended – for bitcoin investors is that BTC is expected to eventually take over from gold as the yellow metal’s rally slows down.
Historical trends suggest that peaks in gold prices typically precede BTC rallies by approximately 100-150 trading days, as noted by Bitfinex analysts. They believe that Bitcoin’s current market consolidation represents a transitional phase, outlining the foundation for a potential rally in 2026.
Bytetree’s Morris shares a similar perspective.
“I’m optimistic about silver, but this trend won’t last indefinitely,” Morris remarked. “I suspect that once this rally loses momentum, bitcoin will take its place.”
