Bitcoin lags gold as debasement trade tilts toward bullion in early 2026

Bitcoin trades near a two-year low versus gold as Bitwise’s liquidity Z-score hits -2, echoing past BTC macro bottoms and a potential rotation setup.

Summary

• Bitcoin trades at a two-year low versus gold on a liquidity-adjusted basis, with its Z-score near -2, a level tied to past BTC cycle bottoms.​
• Bitwise says BTC now sits well below liquidity “fair value,” creating an asymmetric debasement trade if even small gold ETF flows rotate into Bitcoin.​
• A sustained rotation needs intact debasement fears, higher risk appetite, and easing crypto policy headwinds to favor BTC over low-volatility gold.

Bitcoin traded near a two-year low versus gold on a liquidity-adjusted basis in January 2026, with the Z-score dipping into minus-two territory, a level that historically marked major Bitcoin price bottoms before rallies, according to analysis from Bitwise.

Bitcoin trading at a two-year low versus gold

The cryptocurrency traded at a discount to gold on a relative basis adjusted for global money supply, creating what analysts described as a rare asymmetric opportunity in the debasement trade—a strategy involving hard assets such as gold or Bitcoin to protect against currency debasement caused by monetary expansion.

Central banks’ quantitative easing programs have driven investors toward assets with fixed or capped supply. Gold has served as the traditional hedge for centuries, while Bitcoin emerged as a digital alternative with a hard-coded supply cap.

The thesis faced stress-testing in January 2026, as gold hit fresh all-time highs while Bitcoin lagged significantly. Bitcoin slipped to roughly two-year lows in gold-ounce terms, leading some observers to conclude the debasement trade favored gold and silver over Bitcoin.

The counter-narrative circulating among proponents held that Bitcoin was deeply undervalued relative to gold on deviation metrics, with those extremes historically aligning with major Bitcoin price bottoms.

Bitcoin’s price relative to gold, on a liquidity-adjusted basis, showed the cryptocurrency trading well below fair value calculated from the global money supply aggregate, according to Bitwise analysis. The Bitcoin/gold ratio fell sharply below the liquidity fair value line, widening a gap highlighted in the research.

The Z-score measuring standardized residual dropped into minus-two territory in January 2026, positioning Bitcoin more than two standard deviations below the expected value, according to Bitwise. Historically, Z-scores at or below negative one-and-a-half have coincided with major Bitcoin price bottoms, including the 2015 bottom, the 2018–2019 accumulation zone, and the March 2020 crash. Each of these preceded sharp Bitcoin rallies, the analysis showed.

The movable pool from gold to Bitcoin consists primarily of financial gold in ETFs, funds, and futures rather than central bank reserves. Global physically backed gold ETFs ended 2025 with record assets under management after record annual inflows, according to industry data.

A small single-digit percentage of that asset base represents potential rotation capital, analysts said. Larger reallocations would likely require a decisive shift to a risk-on macro regime while maintaining the debasement impulse.

Research on crypto multipliers indicated that equilibrium changes in market cap per unit of inflow could be several times higher due to Bitcoin’s substantial market capitalization. If only a small share of coins were available for payments, the multiplier effect could be large, according to the research. As a result, even modest rotations from gold ETFs could translate into outsized changes in Bitcoin’s market value and price.

The gold price surge has been driven by safe-haven demand, fears over central bank independence, geopolitical risk, and rate-cut expectations from major central banks, according to market observers.

For a rotation into Bitcoin, three conditions would need to occur simultaneously, analysts said. First, the debasement impulse would need to remain intact so allocators still sought hard assets as protection against currency weakness. Second, market risk tolerance would need to rise so allocators favored a higher-beta hard asset over the lowest-volatility option. Third, policy and regulatory headline risk for crypto would need to stop dominating daily price formation.

Recent market action showed that inflows alone might not be sufficient if the macro or policy backdrop turned hostile, with strong crypto product inflows still facing overriding macro and policy tensions, according to market data.

Bitcoin ETFs collectively held a substantial portion of the circulating supply, meaning a meaningful rotation from gold ETFs would be material relative to the current Bitcoin ETF complex, industry data showed.