Gold Soars Over 70% While Bitcoin Sinks: Is the 'Digital Gold' Narrative Dead?

Gold is hitting all-time highs. So why is 'digital gold' getting crushed? As investors flock to physical gold amid rate cut expectations and geopolitical turmoil, Bitcoin is struggling to hold its ground, behaving more like a risk-on tech stock than a safe haven. The stark divergence in 2025 is forcing a reckoning for one of crypto's most enduring narratives.

A Tale of Two Assets: Safety vs. Speculation

This year, gold prices have surged more than 70%, and silver has rallied about 150%, putting both on track for their best year since 1979. The rally is fueled by investors seeking a hedge against volatility and long-term currency debasement. Bitcoin, however, is being held back by macroeconomic headwinds. The market is still unwinding a period of leverage-driven trading, and every rebound has been quickly met with profit-taking.

'Institutional Gold' vs. 'Retail Bitcoin'

Experts highlight a fundamental difference in who uses each asset. David Miller, chief investment officer at Catalyst Funds, said the divergence is hard to ignore. "What gold does that Bitcoin definitely can’t is serve as an actual alternative reserve asset to a currency," Miller noted. "Bitcoin is really a retail play, whereas gold is very much institutional."

The data backs this up. According to the World Gold Council, holdings in gold-backed ETFs have risen every month this year except May. Holdings in the largest gold ETF, State Street's SPDR Gold Trust, have jumped by over 20% in 2025 alone. Wall Street remains bullish, with Goldman Sachs forecasting that gold prices could climb toward $4,900 an ounce by 2026.