As gold shines at a historic high, Bitcoin remains subdued around $88,000. The market's "old script" seems to be turning a new page, set to stage a new asset rotation drama.
The international spot gold price has surpassed $4,500 per ounce, with a cumulative increase of over 70%, poised to achieve its best annual performance since 1979. Meanwhile, after peaking at around $126,000 in October 2025, it has now retreated about 30%, currently fluctuating around $88,000.
This asset pattern of "gold leading, Bitcoin lagging" is quietly replaying the market script of 2020.
1. The Pinnacle Moment for Gold
● On December 24, 2025, the financial market witnessed a historic moment. The spot gold price broke through the $4,500 per ounce mark, reaching an unprecedented height. This surge was not an isolated event; the gold bull market began to show signs in July. On July 21, 2025, spot gold had already risen over 1%, surpassing $3,400 per ounce.
● Entering August, Federal Reserve Chairman Jerome Powell signaled readiness to initiate interest rate cuts, injecting momentum into a new round of gold price increases. Akash Doshi, head of gold strategy at State Street Global Advisors, described this as "the perfect storm for gold."
● Data from the World Gold Council reveals a broader context. In 2024, global central banks net purchased 1,045 tons of gold, accounting for 21% of the year's global gold production. Anke, CEO of the World Gold Council Americas, pointed out that central bank purchases of gold reflect a growing trust and reliance on gold in an uncertain global environment.
2. Bitcoin's Hesitation and Waiting
● While the gold market is booming, Bitcoin, the representative of digital gold, appears relatively calm. Since reaching its historical high in October 2025, Bitcoin's price has retraced about 30%, fluctuating around $88,000.
● Trading platform Kalshi's market assessment data predicts a roughly 50% probability that Bitcoin will fall below $80,000 within the year. Wintermute trading strategist Jasper De Maere believes Bitcoin may oscillate between $86,000 and $92,000.
● Cryptocurrency market analysis firm Santiment's founder, Maksim Balashevich, is more cautious, stating that social media has not yet shown sufficient panic to confirm a market bottom, and Bitcoin could still drop to around $75,000.
● However, the market is not entirely pessimistic. Some analysts believe that $80,000 has formed a solid market bottom. Cointelegraph reported that analyst Arthur Hayes insists that $80,000 will hold. He anticipates a "rising tide effect" in cryptocurrencies as liquidity improves. Some on-chain data also supports this view, indicating that floating supply has been washed out of the market.
3. The Reenactment of Historical Scripts
● The current market pattern is strikingly similar to the asset rotation path of 2020, forming a clear "historical rhyme." From a macro perspective, both periods are at critical junctures of global liquidity turning towards easing.
● The year 2020 saw a massive liquidity injection by global central banks post-pandemic, while 2025 has seen the Federal Reserve implement three interest rate cuts, with the U.S. Treasury purchasing $40 billion in government bonds monthly, leading to a historic high in global money supply.
● Historical data shows that during the 2016-2017 and 2020-2021 cycles, gold rose first in the early stages of liquidity improvement, followed by Bitcoin. In 2020, gold first broke through historical highs, while Bitcoin lingered below previous highs for several months before embarking on a legendary surge.
● This asset rotation is driven by the flow of funds between different risk preference assets—safe-haven assets lead during high uncertainty; when market sentiment improves, risk assets follow. The similarity to 2020 lies in gold once again playing the role of the market "weather vane," while Bitcoin remains relatively lagging.
4. Deep Logic and Fundamental Differences
The divergence in the trajectories of gold and Bitcoin stems from fundamental differences and similarities in their asset attributes. Essentially, both serve as supplements or even alternatives to the traditional monetary system.
● Li Huihui, a professor of management practice at EM Lyon Business School, believes that gold prices essentially hedge against "institutional uncertainty." Gold is shifting from an "anti-inflation tool" to a "institutional anchor asset," with its rising logic no longer relying on economic fluctuations but closely tied to global credit reassessment and sovereign security logic.
● A research report released by CITIC Securities in June pointed out that if the new pattern of reshaping global supply chains and dual development deepens, it implies expansion potential for both gold and Bitcoin market values. The report views Bitcoin as "growth-oriented gold," believing its trading attributes are stronger than gold's in deepening risk-averse scenarios or risk preference reversals.
● Both assets share commonalities in liquidity sensitivity. A loose liquidity environment benefits both, but Bitcoin typically reacts more sensitively and violently to changes in liquidity. The key difference is that gold has a long history and mature consensus, while Bitcoin exhibits stronger growth potential and price elasticity. This also means that Bitcoin's risks and potential returns are more pronounced.
5. Key Signals of Market Turning Points
As gold prices continue to hit new highs, the market's focus gradually shifts to whether funds will flow from gold to Bitcoin, replaying historical rotations. Several analysts have begun to closely monitor this possibility.
● Blockchain News reports that gold is currently showing signs of being overbought, and if the upward momentum of gold prices slows, it may signal an impending fund rotation towards Bitcoin. This pattern aligns with phenomena observed in previous cycles.
● From a market capitalization perspective, gold's total market cap is about $31 trillion, while Bitcoin's is only $1.75 trillion. This significant market cap gap means that even a small portion of funds flowing from the gold market to Bitcoin could create a substantial push.
● Technical indicators also support this possibility. Gold's relative strength index has entered the overbought range, with a reading exceeding 80 as of December 24. Typically, a reading above 70 is considered an overbought signal.
● Pepperstone Group strategist Ahmad Assiri observed that there has not been a significant influx of selling, and gold and silver continue to attract buying during the upward process. This indicates that the current key price level is more of a reference point in the trend rather than an insurmountable ceiling.
6. Institutional Perspectives and Future Outlook
Market institutions generally hold an optimistic view of gold's future. Goldman Sachs predicts that under the baseline scenario, gold prices will rise to $4,900 per ounce by December 2026, with upside risks.
● JPMorgan is even more optimistic, forecasting that average gold prices could reach $5,055 per ounce by the fourth quarter of 2026, and rise to $5,400 per ounce by the end of 2027. DBS Bank expects the long-term bull market trend for gold to remain unchanged, reaching $5,100 in the second half of 2026.
● For Bitcoin's prospects, market analysis shows more divergence. Alex Thorn, head of research at Galaxy Digital, pointed out that options market pricing indicates almost equal probabilities of Bitcoin dropping to $70,000 or rising to $130,000 by the end of June 2026. Jocy, founding partner of IOSG, is clearly optimistic about the first half of 2026, predicting that the policy honeymoon period and institutional allocation will drive prices up.
● From a broader cycle perspective, both Bitcoin and gold face a favorable macro environment. As the trust structure of the global monetary system is restructured and the dollar's status as the sole anchor loosens, both gold and Bitcoin are expected to become cross-sovereign credit alternative assets.
Gold ETF total holdings continue to rise, with the world's largest gold ETF holdings increasing by over one-fifth. Meanwhile, traders are awaiting the U.S. Department of Commerce's investigation results on key mineral imports, which could trigger tariffs on precious metals like silver.
After gold prices reached the high of $4,500 per ounce, the market's focus has shifted to when Bitcoin can catch up with this wave of liquidity. Goldman Sachs analysts believe that as the Federal Reserve may cut interest rates by one percentage point before mid-2026, the gold ETF holdings in Western markets will continue to rise.
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