Summary: Gold surges and plummets, Bitcoin continues to fluctuate. How should retail investors allocate their assets? Looking at it over a longer time frame, the answer may be different from what you think.
Author: Viee, Amelia | Biteye Content Team
On January 29, 2026, gold plummeted by 3% in a single day, marking the largest drop in recent times. Just a few days earlier, gold had just broken through $5600 per ounce to set a new high, and silver also followed suit. The year 2026 has already far exceeded JPMorgan Chase's expectations from mid-December.
Data source: JPMorgan Chase
In contrast, Bitcoin remains in a weak oscillation range after the pullback, and the market performance of traditional precious metals and Bitcoin continues to diverge. Despite being referred to as 'digital gold', Bitcoin seems not yet stable; the more inflation, war, and other traditional favorable conditions for gold and silver arise, the more it resembles a risky asset, fluctuating with risk appetite. Why is this so?
If we cannot understand Bitcoin's actual role in the current market structure, we cannot make reasonable asset allocation decisions.
Therefore, this article attempts to answer from multiple angles:
Why have precious metals surged recently?
Why has Bitcoin performed so poorly over the past year?
Looking back at history, how has Bitcoin performed when gold rises?
For ordinary investors, how should one choose in such a fragmented market environment?
I. The Decade-long Duel: The Battle of Gold, Silver, and Bitcoin Across Cycles
From a long-term perspective, Bitcoin remains one of the highest returning assets. However, over the past year, Bitcoin's performance has significantly lagged behind gold and silver. The market trends from 2025 to early 2026 exhibit a stark binary differentiation, with the precious metals market entering a phase referred to as 'super cycle', while Bitcoin appears somewhat sluggish. Below are comparison data of three key cycles:
Data source: TradingView
Data source: TradingView
This divergence in trends is not new. As early as the beginning of 2020, during the initial phase of the pandemic, gold and silver surged quickly due to risk aversion, while Bitcoin once plummeted over 30% before rebounding. In the 2017 bull market, Bitcoin surged 1359% while gold only rose 7%, and in the 2018 bear market, Bitcoin plummeted 63% while gold only fell 5%. In the 2022 bear market, Bitcoin fell 57% while gold slightly rose 1%. This seems to indicate that the price correlation between Bitcoin and gold is unstable; it appears to be an asset at the intersection of traditional finance and new finance, possessing both technological growth properties and being influenced by liquidity strength, making it more difficult to equate with gold, a millennia-old safe-haven asset.
Therefore, when we are surprised that 'digital gold isn't rising while real gold is exploding', the real discussion should be: Is Bitcoin really regarded as a safe-haven asset by the market? Based on the current trading structure and main capital behavior, the answer may be negative. In the short term (1-2 years), gold and silver are indeed outperforming Bitcoin, but in the long term (10+ years), Bitcoin returns are 65 times that of gold — with an extended timeline, Bitcoin demonstrates a return of 213 times: it may not be 'digital gold', but it is the greatest asymmetric investment opportunity of this era.
II. Cause Analysis: Why Have Gold and Silver Outperformed BTC Recently?
The frequent new highs of gold and silver and the lagging narrative of Bitcoin reflect not only the divergence in price trends but also a deep-seated detachment in asset attributes, market perception, and macro logic. We can understand the dividing line between 'digital gold' and 'traditional gold' from the following four perspectives.
2.1 In the face of a trust crisis, central banks take the lead in buying gold
In an era of strong expectations of currency depreciation, who continues to buy determines the long-term trend of assets. From 2022 to 2024, central banks around the world have continuously increased their gold holdings for three consecutive years, with an average annual net purchase of over 1,000 tons. Whether in emerging markets like China and Poland or resource countries like Kazakhstan and Brazil, gold is seen as a core reserve asset against dollar risk. The key is that the higher the price rises, the more central banks buy — this 'buy more when more expensive' behavior reflects central banks' firm belief in gold as the ultimate reserve asset. Bitcoin struggles to gain central bank recognition, which is a structural issue: gold has a 5,000-year consensus and does not rely on any country's credit; while Bitcoin requires electricity, networks, and private keys, which makes central banks hesitant to allocate it on a large scale.
Data source: World Gold Council, ING Research
2.2 Gold and Silver Return to 'Physical Priority'
As global geopolitical conflicts continue to escalate and financial sanctions are frequently imposed, asset security will become a question of whether it can be redeemed. After the new U.S. government takes office in 2025, high tariffs and export restrictions will frequently disrupt global market order, making gold the only ultimate asset that does not rely on the credit of other countries. Meanwhile, the value of silver in industrial fields begins to be released: the expansion of industries such as renewable energy, AI data centers, and photovoltaic manufacturing has driven up industrial demand for silver, with real supply and demand mismatches behind it. In this context, speculation and fundamentals of silver resonate, resulting in a natural surge that outpaces gold.
2.3 Bitcoin's structural dilemma: from 'safe-haven asset' to 'leveraged tech stock'
In the past, people believed Bitcoin was a tool against the central bank's excessive issuance of currency, but with the approval of ETFs and the entry of institutions, the capital structure has fundamentally changed. Wall Street institutions incorporate Bitcoin into their portfolios, typically viewing it as a 'high-elasticity risk asset' — we can see from the data that in the second half of 2025, Bitcoin's correlation with U.S. tech stocks reached 0.8, an unprecedented high correlation, indicating that Bitcoin is increasingly resembling a leveraged tech stock. When market risks arise, institutions prefer to sell Bitcoin for cash first, rather than buy it like gold.
Data source: Bloomberg
More representative is the crash on October 10, 2025, where $19 billion in leveraged positions were liquidated in one fell swoop, and Bitcoin did not exhibit safe-haven properties; rather, it experienced a crash-like decline due to its high-leverage structure.
2.4 Why is Bitcoin still falling?
In addition to structural dilemmas, Bitcoin's recent prolonged slump has three deeper reasons:
1️⃣ The ecological dilemma of the crypto space, being robbed of business by AI. The ecological construction of the crypto space is severely lagging. While the AI track is madly absorbing capital, the 'innovation' in the crypto space is still playing with memes. There are no killer applications, no real demand, only speculation.
2️⃣ The shadow of quantum computing. The threat of quantum computing is not groundless. Although true quantum cracking is still many years away, this narrative has already deterred some institutions. Google's Willow chip has demonstrated quantum advantages, and while the Bitcoin community is researching anti-quantum signature solutions, upgrades require community consensus, which slows down the anti-quantum process but also makes the network more robust.
3️⃣ OGs are selling off. Many early Bitcoin holders are exiting. They feel that Bitcoin has 'lost its flavor' — transforming from a decentralized idealistic currency into a speculative tool for Wall Street. After the approval of ETFs, the core spirit of Bitcoin seems to have faded. MicroStrategy, BlackRock, Fidelity... institutional holdings are increasingly large, and Bitcoin's price is no longer determined by retail investors but by institutional balance sheets. This is both a blessing (liquidity) and a curse (loss of original intent).
III. In-depth Analysis: The Historical Connection Between Bitcoin and Gold
By reviewing the historical correlations between Bitcoin and gold, it can be found that their price correlation during significant economic events is quite limited and often diverges. Therefore, the term 'digital gold' may not be repeated because Bitcoin truly resembles gold, but rather because the market needs a familiar reference.
Firstly, the linkage between Bitcoin and gold has never been a safe-haven resonance from the very beginning. Bitcoin was still in its early stages within the geek community, with a market value and attention that were negligible. During the banking crisis in Cyprus in 2013, when some capital control measures were implemented, gold prices fell significantly from their high by about 15%; during the same period, Bitcoin soared to over $1000. This was interpreted by some as capital flight and safe-haven funds pouring into Bitcoin; however, in retrospect, the surge of Bitcoin in 2013 was driven more by speculation and early sentiment, and its safe-haven properties were not widely recognized. That year, gold plummeted while Bitcoin soared, and the correlation between the two was very low — the monthly return correlation was only 0.08, nearly zero.
Secondly, the periods of true synchrony only occur during phases of excessive liquidity. After the pandemic in 2020, central banks around the world unleashed unprecedented liquidity, and investors increasingly worried about the excessive issuance of fiat currency and inflation expectations, leading both gold and Bitcoin to strengthen. In August 2020, gold prices reached a then-historical high (breaking $2000), while Bitcoin broke $20,000 at the end of 2020 and then accelerated to above $60,000 in 2021. Many viewpoints suggest that during this period, Bitcoin began to reflect the 'inflation-hedging' digital gold attributes, benefiting from the loose monetary policies of various countries just like gold. However, it should be pointed out that essentially, the loose environment provided a common soil for both to rise, and Bitcoin's volatility is far higher than that of gold (annualized volatility of 72% vs 16%).
Third, the correlation between Bitcoin and gold has been long-term unstable, and the narrative of digital gold remains to be validated. Data shows that the correlation between gold and Bitcoin has been in a fluctuating state over the long term, overall unstable. Especially after 2020, while their prices sometimes rose in tandem, the correlation did not significantly strengthen, and often exhibited negative correlation. This indicates that Bitcoin has not stably played the role of 'digital gold'; its trends are more driven by independent market logic.
Data source: Newhedge
Through retrospective analysis, it can be seen that gold is a safe-haven asset that has been repeatedly validated by history, while Bitcoin resembles an unconventional hedging tool that only exists under specific narratives. When a crisis truly arrives, the market will still prioritize certainty over imagined potential.
IV. The Essence of Bitcoin: Not Digital Gold, But Digital Liquidity
Let's look at it from another angle: what role should Bitcoin really play? Does it really exist to become 'digital gold'?
Firstly, Bitcoin's underlying properties determine that it is fundamentally different from gold. Gold is physically scarce, does not require a network, and does not rely on a system; it is truly the ultimate asset in the sense of doomsday. In the event of a geopolitical crisis, gold can be physically delivered at any time, making it the ultimate safe-haven. In contrast, Bitcoin is built on electricity, networks, and computing power; ownership depends on private keys, and transactions rely on network connectivity.
Furthermore, Bitcoin's market performance is increasingly resembling that of a high-elasticity tech asset. In conditions of loose liquidity and rising risk appetite, Bitcoin often leads the way. However, in the context of rising interest rates and heightened risk aversion, it may also see institutional sell-offs. The current market tends to believe that Bitcoin has not yet truly transitioned from a 'risk asset' to a 'safe-haven asset'; it possesses both high growth and high volatility as a risky side, as well as a safe-haven side against uncertainty. This 'risk-hedge' ambiguity may only be validated through more cycles and crises. Until then, the market still tends to view Bitcoin as a high-risk, high-return speculative asset and associates its performance with tech stocks.
Perhaps only when Bitcoin demonstrates a stable value preservation ability similar to gold can this perception truly be reversed. However, Bitcoin will not lose its long-term value; it still possesses scarcity, global transferability, and the advantages of a decentralized system. Its positioning in today's market environment is more complex, serving as both a pricing anchor and a trading asset, while also being a speculative tool.
Setting the tone: Gold is an inflation-hedging safe-haven asset, while Bitcoin is a growth asset with stronger return properties. Gold is suitable for preserving value during periods of economic uncertainty, with low volatility (16%) and a small maximum drawdown (-18%), serving as the 'ballast' of assets. Bitcoin is suitable for allocation during times of ample liquidity and rising risk appetite, with annual returns as high as 60.6%, but also high volatility (72%) and a maximum drawdown of -76%. This is not a choice of either/or, but a combination of asset allocation strategies.
V. Summary of KOL Views
In this round of macro repricing, gold and Bitcoin are playing different roles. Gold acts more like a 'shield', used to resist external shocks such as war, inflation, and sovereign risks; while Bitcoin acts like a 'spear', seizing value-added opportunities from technological changes.
OKX CEO Xu Mingxing @star_okx emphasized that gold is a product of old trust, while Bitcoin is a new cornerstone of credit facing the future. Bitget CEO @GracyBitget stated that despite inevitable market fluctuations, Bitcoin's long-term fundamentals remain unchanged, and they still have confidence in its future performance. KOL @KKaWSB cited Polymarket prediction data, predicting that Bitcoin will outperform gold and the S&P 500 by 2026, believing that value realization will come.
KOL @BeiDao_98 provided an interesting technical perspective: Bitcoin's RSI against gold has once again fallen below 30, and historically, this signal has predicted that a Bitcoin bull market is about to arrive. Noted trader Vida @Vida_BWE also approached it from the perspective of short-term capital sentiment, believing that after the surge of gold and silver, the market is eager to find the next 'dollar substitute asset', hence buying a small amount of BTC, betting on the FOMO sentiment of capital rotation in the coming weeks.
KOL @chengzi_95330 proposed a more grand narrative path. He believes that traditional hard assets like gold and silver should first absorb the credit shock caused by currency depreciation, and only after they fulfill their roles should Bitcoin enter the scene. This 'first traditional, then digital' path may be the story that the current market is unfolding.
Six, Three Suggestions for Retail Investors
In the face of the differences in price increases between Bitcoin and gold and silver, the most common question among ordinary retail investors is: 'Which one should I invest in?' There is no standard answer to this question, but we can provide four practical suggestions:
1️⃣ Understand the positioning of each asset and clarify the purpose of allocation. Gold and silver still exhibit strong 'hedging' attributes during periods of macro uncertainty, making them suitable for defensive allocations; Bitcoin, on the other hand, is currently more suitable for increasing positions when risk appetite rises and technological growth logic prevails, but be careful not to gamble on getting rich overnight with gold. Want to hedge against inflation → Buy gold; want long-term high returns → Buy Bitcoin (but be prepared for a -70% pullback).
2️⃣ Do not fantasize that Bitcoin will always outperform everything. Bitcoin's growth comes from technological narratives, capital consensus, and institutional breakthroughs, not from a linear return model. It will not outperform gold, the Nasdaq, or oil every year, but in the long run, its attributes as a decentralized asset still hold value. Do not completely deny it during short-term pullbacks, nor should you go all in mindlessly during a surge.
3️⃣ Construct an asset portfolio and accept the reality that different assets play different roles in different cycles. If you have a weak perception of global liquidity and limited risk tolerance, consider using a combination of gold ETFs and a small amount of BTC to respond to different macro scenarios; if you have a stronger risk appetite, you can also combine ETH, the AI track, RWA, and other emerging assets to build a more volatile portfolio.
4️⃣ Can gold and silver still be bought now? Be cautious about chasing highs and prioritize buying on dips. In the long run, gold, as an asset favored by global central banks, and silver, which also has industrial properties, still possess allocation value during turbulent cycles. However, in the short term, their price rises have been significant, and they are technically under pressure to correct; for example, the 3% single-day drop in gold on January 29 serves as an illustration. If you are a long-term investor, consider waiting for a correction to gradually buy in, such as gold below $5000 and silver below $100; if you are a short-term speculator, you need to pay attention to the rhythm and avoid jumping in at the market's peak.
In conclusion: Understanding positioning is key to survival!
When gold rises, no one questions Bitcoin's value; when Bitcoin falls, it does not mean that gold is the only answer. In this era of reshaping value anchors, no asset can meet all needs at once.
In 2024-2025, gold and silver lead the market. But when extending the timeline to 12 years, Bitcoin demonstrates a return of 213 times: it may not be 'digital gold', but it is the greatest asymmetric investment opportunity of this era. Last night's drop in gold may signal the end of a short-term adjustment or the beginning of a larger correction.
For ordinary traders, what is truly important is to understand the role positioning behind different assets and establish their own investment logic to survive in the cycles.
Good luck to everyone!
Disclaimer: This article is for informational reference only and does not constitute investment advice. Cryptocurrency investment carries risks; enter the market with caution.