In the 20 years since its approval, the gold ETF has soared more than 6 times, breaking through a new high of $3,000, and Bitcoin has ushered in a revaluation

Words: Alvis

When the price of gold on the New York Mercantile Exchange topped $3,000 an ounce in June 2024, the roar that erupted on the trading floor pierced half of Manhattan. The total market value of this ancient metal, which holds the memory of 5,000 years of human currency, has swelled to $20.14 trillion – equivalent to 20% of global GDP.

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But just as Wall Street toasts to gold, another, even more shocking epic is unfolding in the digital world: Bitcoin's market capitalization has quietly crossed the $1.55 trillion threshold, narrowing the gap with gold from 100 times to 13 times.

Behind this seemingly disparity lies the most drastic value migration in the history of human civilization. Gold spent 5,000 years to build a temple of value, and Bitcoin took only 15 years to reach the city gates.

Even more shocking is the asymmetry of the time dimension: it took 53 years for gold to go from $1 trillion to $20 trillion (since the collapse of the Bretton Woods system in 1971), while it took only 15 years for Bitcoin to go from zero to $1.5 trillion.

At this moment, $3,000 in gold and $83,000 in bitcoin are like the meeting of a steam locomotive and an internal combustion engine at a turning point in the industrial revolution – the former is still roaring on an inertial track, and the latter has ignited the engine of digital civilization.

Bitcoin's Philosophical Revolution: An Ultimate Experiment Against Fiat Tyranny

Bitcoin was born on the ruins of the 2008 financial crisis, and when Satoshi Nakamoto wrote his famous declaration in the white paper, he may have foreseen that when the Federal Reserve's money printing machine dilutes the value of the dollar in trillions, humanity needs a monetary system that does not require trust in a central authority. This philosophical core constitutes the "Force" of Bitcoin – countering human greed with mathematical certainty and dissolving the monopoly of power with code rules.

Recursive deduction of proof of existence

When Satoshi Nakamoto designed Bitcoin, he essentially completed a proof of existence: how to build an unforgeable system of record of value without relying on centralized authority. The underlying logic of this proof can be seen as a modern response to Hilbert's thirteenth problem—the decomposition of multivariate functions into univariate iterations through elliptic curve cryptography. The hash value of each block is a recursive verification of the "existence of value", like the self-referential proposition in Gödel's incompleteness theorem, establishing a new certainty on the edge of the paradox.

The proof-of-work mechanism (PoW) is essentially a reverse engineering of the second law of thermodynamics. When the mining machine consumes electrical energy to calculate the hash value, the entropy increase in the physical world is converted into a negative entropy flow on the blockchain, and this energy-information conversion efficiency is just like the limit of the Carnot heat engine to convert heat energy into work in an ideal state. The halving event is like the Planck-scale quantum tunneling effect, which doubles the energy level spacing of the system every four years, forcing the market consensus to jump to a higher energy state.

Gold vs Bitcoin consensus

It took 5,000 years for gold to establish a value consensus in human civilization, while Bitcoin completed its transformation from a cryptographic toy to "digital gold" in only 15 years.

Behind this acceleration is the ultimate quest for absolute scarcity in the digital age.

While the annual inflation rate of gold is maintained at 2%-3%, Bitcoin has compressed the annual inflation rate to 0.8% through four halvings, and this deflationary process will continue until the last bitcoin is mined in 2140. This kind of mathematical elegance is dismantling the valuation logic of the traditional financial world.

Not long ago, the Trump administration announced the creation of a strategic bitcoin reserve, which seems to be political speculation, but in fact it is in line with the law of monetary history - when the hegemony of the dollar is challenged geopolitically, sovereign countries begin to look for non-sovereign reserve assets.

It's reminiscent of 2004, when gold-backed ETFs were introduced, when Wall Street used financial instruments to incorporate ancient metals into modern portfolios, and the same story is being repeated with bitcoin today.

The Apocalypse of Gold: How ETFs Reconstruct the Spatiotemporal Dimension of Value Storage

In November 2004, the world's first gold-backed ETF (GLD) landed on the New York Stock Exchange, a seemingly uneventful financial innovation that became a watershed moment in the history of gold pricing.

ETFs convert the physical liquidity of gold into digital liquidity, allowing institutional investors to buy and sell gold as if it were a stock. In the two decades since, gold's market value has swelled from less than US$3 trillion to US$20 trillion, growing at a compound annual growth rate of 12%.

The three stages of this process are revelatory:

Liquidity premium phase (2004-2012): ETFs opened up institutional entry channels, and the price of gold soared from $400 to $1,900, an increase of 375%. Although it experienced a 20% correction triggered by the 2008 financial crisis, it quickly recovered its losses in the wave of quantitative easing.

Revaluation phase (2013-2020): Central banks began to systematically increase their holdings of gold, redefining it from a commodity to a strategic asset. China, Russia and other countries have increased their holdings of hundreds of tonnes of gold reserves each year, pushing the gold price above US$2,00016.

Paradigm shift stage (2021-present): Catalyzed by the US dollar credit rift and geopolitical conflicts, gold broke through the $3,000 mark, completing the identity transition from a risk hedging tool to a fiat currency alternative.

The playbook for Bitcoin ETFs is repeating itself at an accelerated pace. After the approval of spot ETFs in 2024, the average daily purchase volume of institutions such as BlackRock (about 1,200 pieces) has been 2.7 times that of miners (450 pieces). This scissors gap between supply and demand is just like the post-2004 scenario of gold ETFs devouring physical gold liquidity. By the time the Bitcoin ETF exceeded $100 billion under management, the gap between its market capitalization and gold had narrowed from 100 times to 13 times.

The macro code of the halving cycle: when the laws of mathematics encounter geopolitical storms

The essence of the historical law created by the four halves is the resonance of supply shocks and liquidity tides. The price peaks after the first three halvings all correspond precisely to the Fed's easing cycle: QE3 in 2013, a pause in balance sheet reduction in 2017, and a zero interest rate policy in 2021. This temporal coupling is no accident – when the floodgates of the fiat currency system open, Bitcoin's deflationary nature becomes a black hole for liquidity.

But the 2024 halving narrative is changing qualitatively:

Institutionalization has changed the logic of volatility: unlike past cycles dominated by retail investors, ETF holders are now more focused on the 10-year Treasury yield curve than on exchange leverage. When 30% of the liquidity is locked into an ETF, the price volatility shifts from a "roller coaster mode" to a "step-by-step climb".

Geopolitics injects new momentum: The essence of the discussion of the United States to include Bitcoin in its strategic reserve is to build a new type of financial deterrence in the era of the digital Cold War. This trend of "digital gold reserves" may replicate the role of gold after the collapse of the Bretton Woods system in 1971.

Macro hedging demand escalated: In the era when the CAPE ratio of U.S. stocks exceeded 30 and the real interest rate of U.S. bonds was negative, Bitcoin began to divert traditional safe-haven funds. During the crash in early 2025, Bitcoin's correlation with the Nasdaq dropped from 0.8 to 0.4, showing independent asset attributes.

The current consolidation at $80,000 is akin to gold's halftime break after the 2008 correction and 2013 crash. Historical data shows that the true outbreak after the halving tends to lag by 9-15 months, which is highly consistent with the start of the Fed's rate-cutting cycle.

When the market is entangled in short-term resistance, smart money has been laying out a liquidity feast in Q3 2025.

2025: The ultimate showdown between digital civilization and metal civilization

As gold breaks above $3,000, Bitcoin is at a tipping point in its revaluation. The gap between the market capitalization of the two seems to be huge, but in fact, it hides the password for the paradigm shift:

Liquidity dimension: Bitcoin's 24-hour trading volume reached $30 billion, which is three times that of the gold spot market, and this instant clearing capability is even more attractive in times of crisis.

The cost of storage revolution: Hundreds of billions of dollars in gold require heavily guarded vaults, whereas storing the equivalent of bitcoin requires only one string of code to remember. This generational difference in efficiency is rewriting the marginal cost formula for stores of value.

Intergenerational cognitive iteration: Gen Z is more receptive to "digital native" assets, and Goldman Sachs survey shows that the proportion of investors under the age of 25 has reached 34% in cryptocurrency, far exceeding the 12% of gold.

But this is by no means a zero-sum game. Referring to the history of gold-backed ETFs, Bitcoin needs to break through $190,000 to reach 20% of gold's market capitalization (about $4 trillion). This seemingly aggressive target corresponds to a marginal shift in the size of global negative yield bonds (about $18 trillion). When the Bank of Japan continues to implement yield curve control and the Fed is forced to restart QE, Bitcoin will be the ultimate container to devour fiat liquidity.

Tranquility in the eye of the storm: Trend deduction in the second half of 2025

Standing at the threshold of the third quarter of 2025, the forces of multiple cycles are converging:

Halving cycle: Historically, there will be a price peak in the 12th-18th months (April-October 2025) after the April 2024 halving

Monetary Policy Cycle: CME interest rate futures show that the Federal Reserve may cut interest rates by 100 basis points in Q3, releasing about $1.2 trillion in liquidity

Geopolitical Cycle: With the arrival of Donald Trump in the White House and the clarity of the regulatory framework for cryptocurrencies, the long-term narrative and geopolitical changes will be in favor of Bitcoin, despite the short-term benefits

Technically, the tug-of-war of $7-80,000 is a mirror image of gold's consolidation in 2013-2015.

At that time, gold was between $1,200 and $1,400 for 28 months, and finally broke through the shackles in the wave of central bank purchases.

If Bitcoin can hold the key support of $72,000, it is expected to start the main upward wave with the help of liquidity at the turn of summer and autumn.

To the FOMO generation: Hear the future in the breath of the machine

When algorithmic trading accounts for 70% of the trading volume, and when ETF flows become the price baton, Bitcoin seems to be losing its "wildness". But remember: Satoshi Nakamoto never created some kind of price curve, but a mathematical allegory of freedom.

Looking back at the space-time coordinates of 2025, the 20-year trajectory of gold ETFs is like the spiral of the galactic cantilever arm, while the 10-year oscillation of Bitcoin is like the cyclical signal of pulsars. In the dialectic of the Lebegus integral and the Riemann integral, the two jointly compose the epic of expanding the boundaries of human cognition.

Perhaps in the early morning of 2025, when the market value of Bitcoin breaks through 1/10th of that of gold (the price returns to $100,000 again), humanity will officially enter the era of digital hard currency. This is not a prediction, but the unfolding of mathematical necessity in the dimension of time. Just as gold is still looking for direction after breaking through $3,000, Bitcoin's sea of stars is forever in the code for the next halving.