Another week, another record high for the price of gold. And another blow to the bitcoin fan club’s hopeful thesis about owning **“digital gold”**. This year has been hard for the bitcoin brigade: while real gold soared in value, their cryptocurrency didn’t. Correlation went out of the window. **Gold is up 70%** so far in dollar terms; **bitcoin is down 6%**.

In theory, conditions should have been perfect for bitcoin if, like gold, it is supposed to be a store of value in uncertain times. Geopolitical tensions have been high all year, with Donald Trump’s unclear intentions towards Venezuela now added to the mix. Or, if you take the view that bitcoin is a hedge against currency debasement by governments, the news flow ought to have been encouraging. The US budget deficit remains enormous: the International Monetary Fund predicts the country’s debts will climb from 125% to 143% of annual income by 2030, or more than Greece and Italy.

Alternatively, if bitcoin is meant to be a vehicle for tech-related enthusiasm, the artificial intelligence revolution should have offered semi-helpful breezes. Beyond the debate about a bubble in AI assets, chipmaker Nvidia’s share price is still up by a third since January.

Meanwhile, the regulatory backdrop was outright supportive. **Crypto exchange-traded funds** are now marketed by mainstream financial houses. The crypto-cautious UK financial regulator has published proposals to regulate many areas of the crypto market.

Therein – perhaps – lies half an explanation. Bitcoin is simply more boring now that it has been incorporated into the financial mainstream. If JP Morgan and BlackRock are referring to bitcoin as a regular class of asset, something of the revolutionary spirit is lost. Google searches for “bitcoin” are merely steady these days. Even Elon Musk has other things to tweet about.

![Graph showing comparative performance of bitcoin and gold in 2025](https://interactive.guim.co.uk/datawrapper/embed/8WYI3/1/)

As the chart shows, the paths of gold and bitcoin only properly diverged in October during a rapid sell-off in the latter. Precisely what happened on 10 October is still debated, but large selling by leveraged holders of bitcoin into a thin market, in reaction to a Trump tariff threat towards China, is part of the story. The point, though, is that bitcoin didn’t bounce back afterwards, as stocks and precious metals did. The crypto market as a whole shed **more than $1tn of value in six weeks**. From a high of $126,000 in early October, bitcoin now stands at roughly $87,000.

In a research note a month ago, Deutsche Bank analysts offered five factors as an explanation of the fall: a broader **“risk-off” sentiment** in markets in October, hawkish signals on interest rates from the Federal Reserve, less regulatory momentum than expected, thin liquidity and outflows from institutions, and profit-taking by long-term holders.

Its conclusion: “Whether bitcoin stabilises after this correction remains uncertain. Unlike prior crashes, driven primarily by retail speculation, this year’s downturn has occurred amid substantial institutional participation, policy developments and global macro trends.”

For true bitcoin believers every setback is a buying opportunity. Their faith tends to be unshakable and, given how the cryptocurrency has recovered from falls in previous years, one can’t say they are definitely wrong.

Yet it does also feel as if something cracked this year. When demand was high for a proper defensive hedge, investors preferred gold (and silver, which performed even better) over computer code that has failed to take off as a medium of exchange. And the year ends with questions being asked about the real depth of the market for bitcoin and its imitators. The speculative buzz ain’t what it used to be.

Gold is up 70% while the cryptocurrency is down 6% after it failed to bounce back from a rapid October sell-off

Bitcoin vs. Gold in 2025: Why Investors Are Ditching Digital for Real Assets

Bitcoin traded below $90,000 on Tuesday as holiday-thinned liquidity, surging precious metals, and a looming record options expiry shaped price action across crypto markets.

After briefly touching $90,000 intraday on Monday, BTC faded to around $87,400 the following day — continuing a multi-week pattern of upside pushes that meet immediate overhead resistance. According to The Block’s price page, ether also fell to roughly $2,960, BNB to $850, and Solana to $125, pulling total crypto market capitalization back to $3 trillion.

"The tone remains defensive," said Timothy Misir, head of research at BRN. "Rallies lack follow-through, while sell-offs are shallow but persistent."

Wall Street capital flows reflected this unease. U.S. spot bitcoin ETFs posted $142 million in outflows on Dec. 22, The Block’s data shows. ETH products saw $84.6 million in inflows, while Solana and XRP ETFs attracted $7.47 million and $43.89 million, respectively.

## Record Options Expiry Becomes the Primary Driver

Analysts across firms agree that Friday’s Boxing Day expiry is now the dominant catalyst. Roughly 300,000 BTC option contracts — around $23.7 billion in notional value — are set to expire, representing more than half of Deribit’s total bitcoin open interest.

Deribit Chief Commercial Officer Jean-David Pequignot said the expiration is "record-shattering," with $28.5 billion in combined BTC and ETH options set to roll off — double last year’s figure. Despite the scale, he said the market remains "orderly," with bitcoin’s DVOL index hovering near 45.

Positioning clusters around the 85,000 and 100,000 strikes. Pequignot described the structure as "residual optimism for a Santa rally, even if conviction appears limited." Average funding rates have also climbed from 0.04% to 0.09%, signaling a renewed build-up in leveraged longs despite thinning depth.

QCP Capital added that traders are closing out risk rather than rotating it, noting that BTC perpetual open interest fell by approximately $3 billion overnight, while ETH lost around $2 billion. "Liquidity is thinning meaningfully," the firm said, warning that contraction in depth means squeeze risk is elevated in both directions.

Misir and QCP both noted that Christmas-week moves tend to mean-revert in January once market participation returns, making current swings more mechanical than fundamental.

While crypto struggles to find direction, gold surged to a new record near $4,450. Misir said the divergence highlights macro hedging demand returning into year-end as investors navigate political uncertainty.

President Trump confirmed he will announce his pick for the next Federal Reserve chair by early January. It’s not an immediate catalyst, Misir said, but rather a factor that reinforces defensive positioning until clarity emerges.

As of Dec. 23, BTC was on track for its worst fourth quarter returns in eight years. Bitcoin shed 6% year-to-date and lost nearly 20% in the last six months, according to The Block's data.

Analysts warn that a record year-end options expiry is now the dominant volatility driver, as bitcoin traded under $90,000 while gold surged.

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