Bitcoin Falls Behind Gold in 2025, but Long-Term Outlook Remains Strong

• Bitcoin has fallen almost 29% this year while gold surged more than 70% to record highs.
• Gold prices climbed above $4,400 per ounce, driven by inflation fears and interest rate expectations.
• Bitcoin’s fixed 21 million supply and periodic halving events limit new coins entering the market.

Bitcoin has been lagging behind gold this year as the precious metal has rallied more than 70%, nearing a record high of around $4,406. The sharp rise in gold prices has been driven by expectations of interest rate cuts and rising global tensions.

Meanwhile, Bitcoin has been trading below $87,051, marking a decline of nearly 29% from its recent peak. This divergence between Bitcoin and gold has sparked a question within the cryptocurrency market regarding Bitcoin reclaiming its momentum to possibly surpass gold once again.

Source: CoinMarketCap

Bitcoin Struggles While Gold Surges

Gold has been trusted for thousands of years. But in recent times, the pace of gold requirement has increased due to government, central, and institutional purchases of gold. Pressures of inflation, politics, and possible cuts in interest rates have led to more money flowing into gold.

This has led to gold prices soaring above $4,400 per ounce, hitting record highs. Gold is still perceived as a reliable haven by many investors amid uncertain times.

In comparison, BTC has been experiencing pressure from sellers. The digital currency has been trading in a range with reduced strength, while gold continues moving ahead.

Bitcoin Fixed Supply Outshines Gold

Gold supply will increase very slowly. When the price increases, the investment by miners to mine more will increase the supply and relieve the price. BTC has an entirely different model.

However, it should be noted that the supply of BTC is fixed at 21 million coins. No matter how high the price goes, it is not possible to mint more than this fixed supply of BTC. The BTC halving occurs every four years, cutting the supply of newly minted coins by half during this process, thereby making it harder to acquire Bitcoin with the passing of time.

Because of this structure, increased demand does not lead to increased supply for Bitcoin.

BTC Long-Term Model Targets $1.5 Million

Crypto researcher David has recently presented his long-term forecast based on quite conservative assumptions. He models gold growth at 2% each year and Bitcoin’s total market value doubling every four years.

Using these estimates, BTC will reach the market value held by gold in 18 years. This puts the market cap for BTC close to $30 trillion, reflecting a price value per coin close to $1.5 million. The thinking behind this comes from basic math related to supply, not from excitement or proclamation.

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BTC Shows Strength Against Gold

The ratio related to Bitcoin and gold is the BTC to gold ratio, as it shows how BTC is doing compared to gold. At the moment, a falling wedge is forming within the ratio. A falling wedge is a pattern often seen just before a market change.

Momentum indicators like RSI and MACD are also forming a bullish divergence. This is to indicate that selling pressure is declining despite prices being low. Simply put, BTC is falling comparatively less against gold prices, which has happened before during a turnaround in BTC prices during various cycles.

For now, gold remains in the lead, but the data suggests the balance could change over time.

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