Bitcoin and Gold Market Update

Bitcoin (BTC) hovers under $85,000, tracking stock indexes and the tech sector. The leading coin has sharply decoupled from gold recently, which has set new price records.

Bitcoin’s decoupling from gold indicates that its status as a store of value may be vulnerable to short-term fluctuations and aggressive trading. While gold gains attention from mainstream markets, BTC continues to experience aggressive derivative trading coupled with some spot selling pressure.

This recent divergence has led even maximalists to question BTC’s role as digital gold:

> “The fact that gold is soaring and a superior form of gold, the digital gold Bitcoin is dumping is something I will never understand. I know Bitcoin trades like a tech stock, but I’ll never be able to understand the reasoning for it.”
> — WhalePanda (@WhalePanda) March 13, 2025

Despite BTC’s potential for sharper rallies and higher returns for early investors, gold is not forgotten in uncertain times. Gold’s market cap has crossed $20 trillion; by comparison, for BTC to reach equivalent status, it would need to command a price of $1M per coin, a valuation that seems unrealistic in the current market downturn. Gold has outperformed BTC recently, providing more short-term stability.

Gold Reaches New Price Records

Gold traded at $2,983.36 after gains starting March 10. Geopolitical insecurity and increased demand have boosted gold’s value by 34% over the past year, with accelerated gains in recent months. Although gold might be vulnerable to pressure from paper contract holders, it currently retains upward momentum.

BTC, meanwhile, faces downward pressure, recently dipping to $80,804.56, erasing previous gains above $84,000. Panic selling and large daily long liquidations contribute to this downward trend.

With gold also influencing silver markets, silver trades above $34 per ounce but has not yet reached its previous all-time highs.

BTC and Gold Lose Correlation

Historically, BTC peaked when one coin could purchase over 1,000 grams of gold, but this correlation has faded as BTC is now correlated more closely with the S&P500 and NASDAQ than with gold. While some assets commonly move together, gold’s rise has distinctly approached the $3,000 level.

Gold shows demand through Comex vaults, with a peak of 1,250 tonnes of physical gold delivered. There’s noticeable demand for gold entering the US from Europe, contributing to its scarcity.

Conversely, the discussion about a crypto strategic reserve has diminished as BTC continues to see enough sellers depressing its price. While BTC is theoretically more scarce, the availability of gold remains limited, resulting in higher spot prices.

The crypto space’s attempts to offer tokenized gold remain niche, with a valuation of only $1.8B, largely driven by Tether’s XAUT token.