The Bitcoin-to-Gold ratio decreased by 50% in 2025: Here's why

The Bitcoin-to-Gold ratio, which highlights the ounces of gold required to buy one Bitcoin, returned to 20 ounces per Bitcoin, down about 50% from around 40 ounces in December 2024. Instead of a collapse in Bitcoin demand ( $BTC ), this sharp shift reversed the unique macroeconomic system of 2025, where gold asset performances dominated the performance of crypto assets.
Why gold ( $XAUT ) dominated the demand for store of value in 2025
Gold led the global store of value demand in 2025, achieving gains since the start of the year (YTD) of 63% and surpassing $4,000 per ounce in Q4. What made this rise notable was that it occurred despite tight monetary conditions.
This increase happened while U.S. interest rates remained constrained for most of the year, with the Federal Reserve cutting the benchmark interest rate only in September. Historically, this was expected to pressure non-yielding assets, yet gold advanced sharply, highlighting a structural shift in demand.
Central banks were at the core of this movement. Global official sector purchases reached 254 tons by October, led by the Polish National Bank, which added 83 tons. Meanwhile, holdings of gold ETFs worldwide expanded by 397 tons in the first half of 2025, reaching an all-time high of 3,932 tons in November.
This was a significant reversal of the outflow pattern seen in 2023. These flows occurred despite real yields averaging 1.8% across developed markets in Q2, during which gold still gained 23%, indicating a clear decoupling from its traditional inverse relationship with yields.
High uncertainty further increased gold’s appeal. The average VIX index in 2025 was 18.2, up from 14.3 in 2024, and geopolitical risk indices rose 34% year-over-year. The beta of stocks to gold shrank to -0.12, the lowest since 2008, confirming demand from both risk hedging and long-term allocation.
Thus, thanks to tight U.S. financial conditions and delayed policy easing, gold acted less as an inflation hedge and more as a safeguard for broad portfolios in 2025.
Why Bitcoin lagged behind gold on a relative basis
Bitcoin delivered strong returns throughout 2025, reaching six figures and benefiting from demand for spot Bitcoin ETFs. However, compared to gold, Bitcoin lagged as demand conditions weakened in the second half of the year.
Spot Bitcoin investment funds experienced strong momentum initially, with assets under management (AUM) rising from (billion in January to a peak of )billion by July 2025. Since then, assets steadily declined to around (billion over the next five months, reflecting net outflows during price declines and a slowdown in new capital formation. This contrasted with continuous inflows into gold funds during the same period.
Chain data also indicated distribution. According to Glassnode, profit realization for long-term holders )LTH$120 exceeded 1 billion daily on a seven-day average throughout most of July, representing one of the largest profit-taking phases ever.
While realized gains moderated in August, selling resumed later in the year. In October, long-term holders sold about 300,000 Bitcoin, worth $152 billion, marking the most aggressive long-term holder distribution since December 2024. As a result, the long-term holder supply decreased from 14.8 million Bitcoin on July 18 to about 14.3 million Bitcoin currently.
The rise in real yields during most of 2025 increased the opportunity cost of holding Bitcoin, while its correlation with stocks remained relatively high. Gold, on the other hand, benefited from demand as a safe haven and reserve asset. This variation in demand systems explains the shrinking Bitcoin-to-Gold ratio, reflecting a periodic reassessment rather than a structural breakdown of Bitcoin’s long-term thesis.