Bitcoin vs. Gold: Historic Buying Opportunity or Extended Weakness?

Bitcoin vs. Gold: Historic Buying Opportunity or Extended Weakness?

While financial markets have been shaken by dramatic movements in precious metals and Bitcoin has struggled to stabilize above the $83,000 mark, a remarkable development is emerging: The value ratio between Bitcoin and gold has reached a historic low—a level that has marked significant market bottoms in the past. The crucial question for investors now is: Are we facing a repeat of the massive bull market from 2015 to 2017, or is the historical analogy masking a longer period of weakness?

The market dislocations of recent days also demonstrate how closely Bitcoin is now intertwined with traditional financial markets—and how much macroeconomic uncertainties are weighing on the crypto market.

The Facts

After massive sell-offs, Bitcoin recently stabilized at just over $83,000 and recorded slight gains of nearly one percent ^[1]. However, the broader crypto market remains under pressure: Among the ten largest cryptocurrencies, only Solana and TRON posted minimal price gains, while Ethereum, XRP, and Cardano declined by around three percent in 24 hours ^[1].

The real drama, however, played out in precious metals. Silver experienced the largest sell-off in its history, plunging from $118 to temporarily $74—a price loss of 35 percent in a single trading day ^[1]. Gold also came under massive pressure, losing 15 percent and falling below $4,700 ^[1]. Liquidations in tokenized silver futures reached $142 million, the highest volume across the entire crypto market, followed by Ethereum at $139 million and Bitcoin at around $82 million ^[1].

These precious metal movements occur at a remarkable time: Bitcoin's value against gold reached its lowest level ever in January—adjusted for the global money supply ^[2]. This indicator, which shows when Bitcoin is unusually strong or weak relative to gold, moved into an extreme zone that has historically coincided with significant market bottoms ^[2]. The last time this indicator reached similar levels was in 2015, which subsequently led to gains of 11,800 percent within just two years—Bitcoin rose from approximately $165 to $20,000 ^[2].

Analyst Michaël van de Poppe commented on the situation, saying: "Today presents a better buying opportunity for Bitcoin than 2017" ^[2]. Analysts like André Dragosch of Bitwise Europe and Pav Hundal of Swyftx expect a capital rotation from gold to Bitcoin that could begin as early as February or March ^[2]. Over the past year, gold has doubled in value while Bitcoin has fallen by 18 percent ^[2].

However, analyst Benjamin Cowen warns against excessive expectations. He argues that Bitcoin's downtrend could last longer than many holders expect, and that BTC "will likely continue to bleed against the stock market" ^[2]. The hope for a "massive rotation" out of gold and silver could be misplaced in the short term ^[2]. Financial institutions like Citi are forecasting further gains for silver in the coming months due to demand from China and a weaker US dollar, while RBC Capital Markets predicts a gold price of $7,000 by the end of 2026 ^[2].

Despite the sharp decline, on-chain data shows that long-term holders are building their positions. The supply held by Long-Term Holders (entities holding BTC for over 155 days) began recovering during the January sell-off ^[2]. The LTH Spent Binary, a metric that shows whether long-term holders are selling or holding their positions, also continued to decline ^[2]. In previous cycles, a recovery in LTH supply and declining LTH Spent Binary values preceded the formation of durable Bitcoin bottoms ^[2].

Analysis & Context

The current constellation offers both encouraging and warning signals for Bitcoin investors. The historically low value ratio to gold is indeed remarkable, but history rarely repeats itself exactly. Market conditions in 2025 fundamentally differ from 2015: Bitcoin is now significantly more mature, institutionally anchored, and more strongly integrated into regulatory frameworks. This makes the market more stable, but also less explosive.

The movements of long-term holders are a particularly meaningful signal. These experienced market participants have lived through multiple cycles and typically accumulate not out of euphoria, but from strategic conviction. The fact that they are buying during weakness while short-term speculators exit follows the classic pattern of successful market bottoms. However, timing is crucial: Between accumulation and significant recovery, weeks to months can pass—a period that requires patience.

Macroeconomic conditions remain complex. The dramatic precious metals crash shows how quickly supposedly safe havens can come under pressure when positions are overheated and liquidations trigger chain reactions. Tensions between the US and Iran, a looming government shutdown, and uncertainty about monetary policy direction under new Fed Chair Kevin Warsh are weighing on overall risk sentiment. In such an environment, Bitcoin as a risk asset could initially remain under pressure before a sustainable recovery sets in. The notion of an immediate, massive rotation from gold to Bitcoin appears optimistic given this constellation—a gradual process over several months is more likely.

Conclusion

• Bitcoin has reached a historic valuation low against gold that marked past market bottoms—however, historical patterns don't guarantee repetition, especially in a changed market environment

• Accumulation by long-term holders during the weak phase is a constructive signal, but several weeks to months can pass between bottom formation and significant recovery

• A capital rotation from precious metals to Bitcoin is plausible in the medium term, but given macroeconomic uncertainties and continued bullish precious metal forecasts, it is likely to be gradual rather than explosive

• The dramatic silver crash demonstrates the risks of overheated markets and shows that even supposedly safe assets are vulnerable to massive corrections

• Investors should view the current phase as a potential accumulation phase, but maintain realistic expectations regarding the timing of a sustainable recovery