As the value of Bitcoin against gold has plummeted over 40% this year, the debate over whether Bitcoin is digital gold has resurfaced. Renowned economist and gold advocate Peter Schiff commented on social platform X on Monday, pointing out that the value of Bitcoin is rapidly declining and urging investors to "sell Bitcoin and move into physical precious metals."

Although Bitcoin is currently trading at around $89,800, which is a decline of about 28.5% compared to its historical high of around $109,000 set in early 2025, when measured against gold, the decline appears even more severe. According to the latest prices, one Bitcoin can now only be exchanged for about 60% of the amount of gold it could at the beginning of the year, reflecting the relative weakness of crypto assets in terms of their value preservation function.

Explanation: What does 'depreciation against gold' mean?

It should be noted that the '40% depreciation of Bitcoin against gold' here refers to the decline in Bitcoin's purchasing power measured in gold, rather than a direct drop in its USD price by 40%.

For example, if at the beginning of 2025, one Bitcoin could be exchanged for 30 ounces of gold, it can now only be exchanged for about 18 ounces, which indicates a decline in value of about 40% when measured in gold. This change in the 'BTC/XAU' ratio is often used to evaluate whether Bitcoin can truly serve as a 'value storage tool' like gold, in combating inflation and providing a hedge.

In terms of USD prices, Bitcoin's cumulative increase since mid-2022 has still reached nearly 198%, significantly higher than gold's 117%, but the 'relative weakness' in the short term has prompted the market to reassess the fundamental differences between these two assets.

Gold has surged past the $4,000 barrier, and Bitcoin's market value has been surpassed.

Currently, the spot gold price firmly holds at a new high of $4,045 per ounce, with a cumulative increase of over 55% this year, and its market value has risen to about $28.3 trillion. In contrast, Bitcoin not only fails to sustain the momentum brought by the ETF boom and halving effect in 2024 but also ranks at the bottom among major assets in 2025, with its market value hovering around $1.8 trillion. This comparison has made Schiff's criticisms more forceful. He emphasized: 'Bitcoin is not digital gold, but rather digital fool’s gold', once again questioning its ability to serve as a hedge and store of value.

Traditional assets are increasingly divergent from cryptocurrencies.

Gold and Bitcoin have long been viewed as representatives of 'non-sovereign assets', and investors often use both as tools to combat inflation and currency depreciation. However, this year's market performance has clearly favored the gold camp. With rising geopolitical tensions and increased uncertainty in global central bank policies, the appeal of physical assets has significantly strengthened.

The current gold/Bitcoin exchange rate has reached its highest level since early 2023, providing gold advocates with a new argument that 'truly value-preserving assets must be tangible, scarce, and have stood the test of time.'

Divergent voices still exist, with some institutions optimistic about a Bitcoin rebound.

Despite Schiff's continuous bearish outlook on Bitcoin, there are still voices in the market holding the opposite position. JPMorgan, in its latest research report, pointed out that if institutional investors continue to enter the market and global economic uncertainty remains unresolved, Bitcoin may experience a new wave of increases in 2026, even challenging gold's position as an alternative store of value.

This report also reminds investors that although Bitcoin's performance has been poor this year, its volatility and market structure imply that the possibility of a rebound still exists, especially against the backdrop of a warming macro risk environment.

As of Tuesday morning, Bitcoin is priced at $89,800, down 1.2% in the past 24 hours. In contrast, gold prices remain stable at a high level, with a spot price of $4,045 per ounce. This price difference highlights the divergence in trends between the two in the short term and adds more topics to the debate over 'digital gold' and 'physical gold'.

This article Bitcoin will depreciate against gold by 40% in 2025, economist Schiff: Sell Bitcoin! First appeared in Chain News ABMedia.