The conclusion of the gold rush in October 2025
After a remarkable surge that elevated gold prices to over $4,300 per ounce, the metal hit a new record due to heightened safe-haven interest. By October 2025, the market began to see profit-taking.
On Oct. 17, 2025, gold prices dropped by over 2% right after reaching the record high. At the time of this writing, spot gold was priced at approximately $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 statement that sustaining full tariffs on China would not be viable. Furthermore, a stronger US dollar and renewed investor interest in higher-yielding assets such as Bitcoin (BTC) also contributed to the downturn.
Did you know? The phrase “digital gold” gained traction as Bitcoin’s scarcity and independence started to echo gold’s role as an inflation hedge.
The history of gold: Peaks and crashes
Gold’s narrative is filled with significant spikes and sharp drops, influenced by inflation, interest rates, and geopolitical factors. From its high in the early 1980s to the steep correction post-2013 and its robust growth in the 2020s before the October 2025 decline, the gold market has seen many fluctuations.
1980-1999 decline: After a swift rise fueled by soaring inflation and geopolitical concerns, gold reached its peak in January 1980 at around $850 per ounce. The bullish trend ended with the “Volcker Shock,” where then Federal Reserve Chair Paul Volcker drastically increased interest rates. Between 1980 and 1982, the Fed raised the federal funds rate above 20% to control inflation, which led to a significant recession. This caused a major sell-off, resulting in gold prices plummeting by over 60% by 1982 and entering a prolonged bear market. From approximately $850 per ounce in 1980, the gold price fell to about $278 per ounce by 1999.
2012-2018 downturn: Following a peak in 2011, gold entered a lengthy slide as the global economy stabilized and equities outperformed, diminishing gold’s allure as an investment. In 2013, the US Federal Reserve started tapering its quantitative easing program, bolstering the US dollar and directing capital towards higher-yielding assets, putting additional pressure on gold prices. The SPDR Gold Trust, a major gold-backed ETF, experienced over 30% of its holdings being withdrawn, indicating declining investor interest. Between 2014 and 2018, gold traded between $1,200-$1,400 per ounce, down from roughly $1,680 in 2012.
2020s: Gold regained its status as a safe-haven asset amid global uncertainty in the 2020s. When COVID-19 disrupted economies, governments worldwide introduced over $10 trillion in stimulus, raising concerns about inflation. By 2022, US inflation surpassed 9%, reinforcing gold’s role as a financial shield. Central banks also ramped up their purchases, acquiring about 1,000 metric tons of gold annually between 2022 and 2024. Even amid rising interest rates, gold prices climbed from around $1,785 in 2020 to over $3,200 by early 2025.
The October 2025 gold crash, nonetheless, has prompted investors to look for alternatives like Bitcoin (BTC), which remains relatively independent of government and central bank policies.
The influx of capital into Bitcoin
The narrative of digital gold has gained substantial traction, with younger investors increasingly perceiving Bitcoin as a contemporary hedge against inflation and currency depreciation. Many now find Bitcoin to be more accessible and innovative than physical gold, boosting its market capitalization from $134 billion in 2019 to over $2.4 trillion by the first half of 2025.
Spot Bitcoin ETFs and exchange-traded products (ETPs) offer institutional-grade access, drawing billions in regulated inflows. In early October 2025, US spot Bitcoin ETFs reported a record $3.55 billion in weekly inflows, led by BlackRock’s iShares Bitcoin Trust (IBIT), contributing to BTC surpassing $126,000. Conversely, gold ETFs suffered outflows exceeding $2.8 billion in recent weeks, highlighting the contrast with Bitcoin’s momentum.
Historically, gold outflows and Bitcoin inflows have demonstrated an inverse correlation, with Bitcoin’s relation to gold decreasing to -0.3 during risk-on sentiment periods. Exchange balances have dropped to a six-year low of 2.83 million BTC, indicating diminished selling pressure.
Is a $200,000 Bitcoin target feasible?
Bitcoin’s trajectory towards $200,000 appears bolstered by robust market and macroeconomic forces. The April 2024 halving reduced block rewards, constricting supply amidst increasing demand. Various indicators continue to point toward steady growth for the cryptocurrency.
As global debt consistently rises, Bitcoin’s appeal as a decentralized investment asset is on the rise. By the first half of 2025, global debt reached nearly $338 trillion — about 235% of global GDP.
Institutional drivers of Bitcoin adoption are gaining steam. As of Oct. 24, 2025, Strategy (MSTR) owned 640,418 BTC, followed by Marathon Digital Holdings (MARA) and Celsius (CEP), which held 53,250 and 43,514 BTC, respectively.
Any move by the US Federal Reserve to ease monetary policy could offer an additional lift. The $200,000 mark represents a strong psychological target, likely motivating investors to pivot away from assets like gold, which has already seen $2.8 billion exit its ETFs.
Did you know? Gold has maintained its position as a store of value for over 5,000 years, while Bitcoin has achieved similar recognition in just over a decade.
The migration of capital from gold to Bitcoin
The migration of capital from gold to Bitcoin has often characterized major market cycles, illustrating how investor preferences shift over time. Significant cycles include:
2013-2017: From 2013 to 2017, gold prices remained fairly stable between $1,200 and $1,400 per ounce after the peak in 2011, while Bitcoin skyrocketed from $100 to $20,000. This rise was driven by retail investors seeking a decentralized alternative to fiat.
2020-2021: Between 2020 and 2021, institutional adoption propelled Bitcoin to $69,000 as pandemic-era stimulus and inflation concerns led companies like MicroStrategy to prefer BTC over gold. Historically, gold attracts cautious investors during stable times, whereas in risk-on periods, Bitcoin usually attracts capital due to its scarcity and growth potential.
Current trends reinforce this transition. Bitcoin ETFs saw $3.55 billion in weekly inflows in October 2025, while gold ETFs faced $2.8 billion in outflows. These trends highlight a generational shift towards digital assets amidst ongoing global uncertainty.
Did you know? Gold’s supply increases by about 1% annually, whereas Bitcoin’s supply growth halves every four years, creating a scarcity that enhances its long-term value proposition.
Challenges on Bitcoin’s journey to $200,000
While crypto supporters anticipate Bitcoin reaching $200,000, the journey may encounter several obstacles, including volatility, regulatory uncertainties, potential recovery of gold, and competition from other assets:
Bitcoin’s volatility: Like all cryptocurrencies, Bitcoin is subject to high volatility, experiencing sharp rises and falls. Institutional purchases can prompt price surges, while major holders (“whales”) selling their Bitcoin can lead to swift drops.
Regulatory ambiguities: Globally, the regulatory landscape surrounding Bitcoin is still evolving. Ongoing uncertainty regarding taxation and compliance may deter institutional involvement.
Gold’s potential resurgence: In October 2025, certain investors who saw substantial gains began withdrawing funds from gold miner ETFs. Conversely, crypto ETFs recorded a global influx of $5.95 billion in the third week of October 2025, according to Reuters. Robust demand for crypto assets contributed to Bitcoin reaching an all-time high. However, as a safe-haven asset, gold might still experience a comeback.
Competition: Equities, which average annual returns around 10%, compete with digital assets. Tokenized treasuries and central bank digital currencies (CBDCs) present stable alternatives that could siphon funds away from Bitcoin.
A generational shift in store-of-value perceptions
A generational transition is reshaping perceptions of store-of-value assets. Younger investors, influenced by the digital landscape, are increasingly inclined towards Bitcoin for its decentralized, borderless nature and high-growth potential.
In contrast, older generations still favor gold due to its physical nature and established stability. The accelerating digitization of finance fosters this transition, as blockchain technology replaces slow, traditional systems with more transparent and efficient alternatives.
Nonetheless, gold and Bitcoin may coexist in a dual-hedge approach over time. Gold provides dependability through its physical scarcity and historical reliability, while Bitcoin offers growth through its limited supply and digital flexibility. Together, they present a balanced approach between tradition and innovation, reflecting how investors adapt to a complex financial landscape.
