Bitcoins sharp rejection of $90,000 on Wednesday was a quick reminder to investors that precious metals like gold and silver are the real winners of the debasement trade, not — at least for now — digital gold.
Back in October, JPMorgan analysts said gold and bitcoin both benefited and would continue to benefit from the so-called deterioration trade. They expected BTC to follow gold’s lead and set a BTC price target of $165,000 on a volatility-adjusted basis relative to gold.
So far, that thesis has not played out.
While BTC languishes at around $88,000, down 30% from its high in early October, gold is trading near record highs around $4,350 an ounce, and silver on Wednesday hit new records above $66, up 40% since October.
“Bitcoiners cannot ignore the bull market in precious metals, which continues to roar,” said Charlie Morris, founder of ByteTree.
Why is BTC lagging?
Bitcoin’s current weakness stems from its connection to risky assets, Morris wrote in a Wednesday report. While stock indexes have hovered near record highs, the stock market’s most speculative pockets — data centers and bets on artificial intelligence infrastructure and recent IPO names — have seen sharp moves over the past few weeks.
There is also a technical element behind bitcoin’s relative weakness to gold. The BTC gold ratio already peaked at the end of 2024 and is deep in a bear market tumbling over 50%.
In August, BTC-gold made a lower high, indicating fading momentum, and has since rolled over, making a new low on Wednesday and its weakest level in nearly two years.
Structural selling by long-term owners has also contributed to bitcoin’s weakness. Research by Vetle Lunde, head of research at K33, noted that BTC offerings held in UTXOs (unspent transaction outputs) older than two years have been in a sustained decline, with around 1.6 million BTC reactivated since 2024. Separately, Glassnode data also shows that long-term investors have increased their sales.
“This represents onchain evidence of significant, sustained selling pressure from long-term owners,” Lunde said.
There is also growing discussion around the risks quantum computers pose to Bitcoin’s cryptographic security. While the concern remains largely theoretical, it has added a layer of uncertainty for investors.
Analyst: Silver rally could set the stage for BTC
For bitcoin investors – no pun intended – the bottom line is that BTC will eventually take over from gold as the yellow metal’s rally cools.
Historical patterns show that gold tops often precede BTC rallies by 100-150 trading days, Bitfinex analysts pointed out. They said bitcoin’s current market consolidation is a transitional phase that lays the groundwork for a 2026 catch-up.
Bytetree’s Morris expressed a similar view.
“I remain bullish on silver, but it won’t continue forever,” Morris said. “I suspect that when the rally runs out, bitcoin will step in.”
