The conclusion of the gold rush in October 2025
Following a notable rally that drove gold prices past $4,300 per ounce, the metal achieved a significant landmark fueled by robust safe-haven demand. By October 2025, profit-taking began to influence the market.
Gold prices dropped over 2% on Oct. 17, 2025, shortly after hitting the peak. At the time of writing, spot gold was valued at approximately $4,023 per ounce, reflecting an 8.1% decrease from the record high of $4,378.69.
The main reason for the decline was the easing of US-China trade tensions after President Donald Trump indicated that sustaining full tariffs on China would be impractical. Additionally, a stronger US dollar and renewed interest in higher-yield assets like Bitcoin (BTC) led to the downturn.
Did you know? The phrase “digital gold” became widely used as Bitcoin’s scarcity and independence started to resemble gold’s purpose as a safeguard against inflation.
The history of gold: Crashes and peaks
Gold’s past is characterized by dramatic increases and significant falls, influenced by factors such as inflation, interest rates, and geopolitical situations. From its early-1980s high through the steep correction post-2013 and its powerful rally in the 2020s before the October 2025 decline, the gold market has experienced numerous fluctuations.
1980-1999 decline: After a swift price rise due to high inflation and geopolitical tensions, gold peaked in January 1980 at around $850 per ounce. The rally ended with the “Volcker Shock,” when Federal Reserve Chair Paul Volcker sharply raised interest rates. From 1980 to 1982, the Fed pushed the federal funds rate above 20% to control inflation, prompting a severe recession. This resulted in a significant sell-off, with gold prices dropping over 60% by 1982, entering a protracted bear market, declining from about $850 per ounce in 1980 to approximately $278 per ounce by 1999.
2012-2018 decline: After reaching a high in 2011, gold faced a lengthy downturn as the global economy stabilized and equities outperformed, diminishing gold’s attractiveness as an investment. In 2013, the US Federal Reserve began reducing its quantitative easing, strengthening the dollar and diverting capital towards higher-yield assets, further exerting pressure on gold prices. The SPDR Gold Trust, a significant gold-backed ETF, witnessed over 30% of its holdings being withdrawn, indicating reduced investor interest. Between 2014 and 2018, gold fluctuated between $1,200-$1,400 per ounce, down from around $1,680 in 2012.
2020s: The 2020s reestablished gold’s status as a safe-haven asset during global uncertainty. As COVID-19 stalled economies, governments worldwide implemented over $10 trillion in stimulus, raising inflation concerns. By 2022, US inflation had exceeded 9%, reinforcing gold’s role as a financial safeguard. Central banks also increased their purchases, acquiring approximately 1,000 metric tons of gold yearly between 2022 and 2024. Despite rising interest rates, gold prices climbed from about $1,785 in 2020 to over $3,200 by early 2025.
The October 2025 crash, however, has prompted investors to seek alternatives like Bitcoin (BTC), which tends to operate independently of governmental and central bank policies.
The influx of funds into Bitcoin
The digital gold narrative has notably gained traction, with younger investors increasingly perceiving Bitcoin as a contemporary hedge against inflation and currency devaluation. Many now find Bitcoin more accessible and innovative compared to physical bullion, propelling its market capitalization from $134 billion in 2019 to over $2.4 trillion by early 2025.
Spot Bitcoin ETFs and exchange-traded products (ETPs) facilitate institutional access, drawing billions in regulated inflows. In early October 2025, US spot Bitcoin ETFs recorded an unprecedented $3.55 billion in weekly inflows, led by BlackRock’s iShares Bitcoin Trust (IBIT), aiding BTC in surpassing $126,000. In contrast, gold ETFs endured outflows exceeding $2.8 billion recently, underscoring the disparity with Bitcoin’s momentum.
Historically, gold outflows and Bitcoin inflows demonstrate an inverse correlation, with Bitcoin’s association with gold decreasing to -0.3 during periods of risk-on sentiment. Exchange balances have diminished to a six-year low of 2.83 million BTC, indicating reduced selling pressure.
Bitcoin’s $200,000 target: Is it feasible?
Bitcoin’s trajectory towards $200,000 seems supported by robust market and macroeconomic factors. The April 2024 halving cut block rewards, restricting supply as demand grows. Several indicators suggest a steady upward trend for the cryptocurrency.
With global debt continually rising, Bitcoin’s allure as a decentralized investment is increasing. By the first half of 2025, global debt reached nearly $338 trillion—around 235% of global GDP.
Institutional drivers promoting Bitcoin adoption are gaining traction. As of Oct. 24, 2025, Strategy (MSTR) held 640,418 BTC, followed by Marathon Digital Holdings (MARA) and Celsius (CEP) with 53,250 and 43,514 BTC, respectively.
A shift in US Federal Reserve monetary policy could provide an additional boost. The $200,000 mark serves as a significant psychological benchmark, likely encouraging investors to move funds away from assets like gold, which has already witnessed $2.8 billion exiting its ETFs.
Did you know? Gold has maintained its status as a store of value for over 5,000 years, while Bitcoin has achieved similar recognition in just over a decade.
The shift of capital from gold to Bitcoin
The migration of capital from gold to Bitcoin has often delineated significant market cycles, illustrating how investor preferences transform over time. The key cycles are:
2013-2017: From 2013 to 2017, gold prices remained relatively stable between $1,200 and $1,400 per ounce after peaking in 2011, while Bitcoin surged from $100 to $20,000. This rise was propelled by retail investors seeking a decentralized alternative to fiat currency.
2020-2021: Between 2020 and 2021, institutional adoption catalyzed Bitcoin’s rise to $69,000 as pandemic-related stimulus and inflation apprehensions led companies like MicroStrategy to prefer BTC over gold. Historically, gold attracts cautious investors during stability, yet in risk-on phases, Bitcoin tends to attract capital due to its scarcity and growth potential.
Current trends reinforce this transition. Bitcoin ETFs reported $3.55 billion in weekly inflows in October 2025, whereas gold ETFs experienced $2.8 billion in outflows. These patterns highlight a generational shift toward digital assets amidst ongoing global uncertainty.
Did you know? Gold’s supply increases approximately 1% annually, while Bitcoin’s supply growth halves every four years, creating increasing scarcity that enhances its long-term value narrative.
Challenges on Bitcoin’s journey to $200,000
While crypto advocates anticipate Bitcoin reaching $200,000, the path is fraught with challenges, including volatility, regulatory uncertainties, the potential for a gold resurgence, and competition from other assets:
Bitcoin’s volatility: Like other cryptocurrencies, Bitcoin is subject to significant volatility, undergoing sharp rises and falls. Institutional purchases can ignite price rallies, whereas major holders (“whales”) liquidating their Bitcoin may result in sudden drops.
Regulatory ambiguities: In many regions, Bitcoin regulation is still evolving. Ongoing uncertainties regarding taxation and compliance may deter institutional engagement.
Potential gold rebound: In October 2025, some investors who had enjoyed significant returns started withdrawing funds from gold mining ETFs. Meanwhile, crypto ETFs witnessed record inflows of $5.95 billion globally in the third week of October 2025, as reported by Reuters. Strong interest in crypto assets propelled Bitcoin to an all-time high; however, as a safe-haven asset, gold could still recover.
Competition: Equities, with average annual returns around 10%, compete with digital assets. Tokenized treasury instruments and central bank digital currencies (CBDCs) also offer stable alternatives. Such options might divert investments from Bitcoin.
A generational transition in store-of-value assets
A generational shift is transforming perceptions of store-of-value assets. Younger investors, influenced by the digital age, are increasingly attracted to Bitcoin for its decentralized, borderless nature and potential for high returns.
Conversely, older generations continue to prefer gold for its tangible presence and proven reliability. The increasing digitization of finance is accelerating this transition, as blockchain technology replaces slow, paper-based systems with more transparent and efficient solutions.
However, gold and Bitcoin may coexist within a dual hedge model over time. Gold provides reliability through its physical scarcity and historical precedent, while Bitcoin offers growth potential through its limited supply and digital flexibility. Together, they present a balance of tradition and innovation, reflecting how investors are adapting to an increasingly intricate financial landscape.
