BTC-to-Gold Ratio: What Happened

Fall: Ratio dropped from 40 to 20 ounces per BTC → 50% decline.

Reason: Not a Bitcoin collapse, but gold outperformed in 2025.

Macro Context: Gold became the preferred store-of-value in a year of tight monetary policy and elevated risk.

Why Gold Outperformed

Central Bank Buying:

254 tonnes purchased globally through October 2025.

Poland’s central bank alone bought 83 tonnes.

Gold ETF Inflows:

397 tonnes added in H1 2025, pushing total holdings to a record 3,932 tonnes by November.

Market Conditions:

US interest rates stayed high until September → usually bad for non-yielding assets.

Yet, gold gained 63% YTD, showing structural demand shift.

Safe-Haven Appeal:

Geopolitical risk index +34% YoY.

VIX rose to 18.2 → gold used as portfolio insurance.

Equity beta for gold fell to -0.12, the lowest since 2008.

Why Bitcoin Lagged

ETF & Spot Demand Weakening:

Spot BTC ETF AUM peaked at $152B in July, dropped to $112B by year-end.

Profit-Taking by Long-Term Holders (LTHs):

Over 500,000 BTC sold by LTHs in H2 2025.

Peak distribution: ~300,000 BTC in October (~$33B).

High Opportunity Cost:

Real yields were high → holding non-yielding Bitcoin became less attractive.

Bitcoin remained correlated with equities → less safe-haven appeal.

Bottom Line

The BTC–gold ratio compression is cyclical, not structural.

2025 was dominated by safe-haven and reserve-driven demand favoring gold.

Bitcoin still delivered strong absolute gains but lagged gold on a relative basis.

2026 Outlook

If risk-off sentiment eases and real yields stabilize, Bitcoin could recover relative strength versus gold.

Conversely, if geopolitical or macro uncertainty continues, gold may retain its dominance in the short term.