The ‘Digital Gold’ Narrative Fails Bitcoin (Again)

Bitcoin is not in its ‘digital gold’ period, asserted the CEO and founder of the analytics company CryptoQuant. He based his conclusion on the fact that the correlation between the largest cryptocurrency and the biggest precious metal has diverged massively in the past several months.

When we examine the price performance of bitcoin and gold more closely, we can clearly see where this difference comes from. The correlation between the two was mostly in the green between 2022 and mid-2024.

Then, they broke out, going into red territory for the first time in years during and after the US presidential elections at the end of 2024. BTC skyrocketed to new peaks, while gold trailed behind.

Once the precious metal started to catch up, the correlation jumped to and over 0.5 by Q3 and early Q4 of 2025. However, that’s when the entire landscape in crypto broke, while the precious metal market continued to blossom.

Bitcoin experienced one of its most painful daily corrections on October 10 that altered the industry’s fabric. In a 24-hour period, the entire market collapsed, leaving more than $19 billion in liquidations.

Since then, the asset has not only been unable to recover to the previous heights, but it has continuously declined in value, dropping to $63,000 as of press time. In other words, it sits 50% away from its peak.

In contrast, gold’s price tapped a new all-time high at $5,600 at the end of January, and, besides its instant and untypical crash to $4,400, has been mostly sitting around and above $5,000. It now trades 30% above its October 10 price of $4,000, and its market cap is north of $36.1 trillion. This means the difference between the two is roughly 30x in terms of market cap.

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