Gold has surged nearly 60% this year, significantly outperforming bitcoin which has only seen a modest increase of 13% – despite ongoing discussions of a bull market.
Experts indicate that gold is not overpriced, even after its substantial rise, and traders on Kalshi are optimistic that 2025 will see gold outperform BTC.
However, data from Hyperliquid indicates that crypto traders are struggling. Only 34% are in long positions, with just 35% reporting profits, leaving many stuck in losing short positions as market volatility increases, exacerbated by hyper-leveraged accounts.
The average daily PnL for users has dropped to just under $50K, suggesting that most traders have consistently misjudged market movements.
This paints a stark picture of a trading community that has been caught off guard. The recent losses suffered by celebrity trader Machi Big Brother, whose account fell from $43 million in profits to over $13 million in losses, highlights the dangers of over-leveraged bets on bitcoin’s recovery.
The mix of misguided belief and excessive leverage has turned crypto markets into a graveyard of poorly timed trades instead of a true reflection of macro demand.
Glassnode’s latest market report further underscores this state of fragility.
The firm notes that the recent $19 billion deleveraging stands as one of the largest in bitcoin’s history, eradicating leverage and placing the market in what it describes as a “reset phase.”
Funding rates have plummeted to levels comparable to the 2022 FTX collapse, ETF inflows have turned negative, and long-term holders are selling into strength. Glassnode warns that unless fresh demand arises, bitcoin could face a deeper contraction below the $108,000 mark.
In contrast, gold’s rise has been propelled by conviction rather than leverage. Geopolitical strains, easing inflation, and expectations of U.S. rate cuts have all bolstered its status as a safe-haven asset amid macro uncertainty. The speculative structure of crypto, reliant on ETF flows and derivative leverage, has failed to harness the same positive narrative momentum.
Currently, the data paints a clear picture: while traders may desire a bitcoin bull market, the reality they face resembles gold’s market much more closely.
Market Movement:
BTC: Bitcoin is currently priced around $108,287, experiencing a decline due to renewed risk aversion, profit-taking following recent gains, and macroeconomic uncertainty.
ETH: Ether is trading at $3891, also experiencing a sell-off alongside BTC as speculative interest wanes under broader crypto market pressure.
Gold: Gold is on the rise as investors seek security amidst ongoing geopolitical tensions and expectations of U.S. rate reductions.
Nikkei 225: The Nikkei 225 has dipped 0.3% as major Asian markets fall amid escalating geopolitical concerns.
