The Turning Point of "Digital Gold": Why Bitcoin and Gold's Fates Changed in 2025

At the end of 2024, investors were diving into asset forecasts for 2025. Stock market watchers focused on the S&P and Chinese A-shares, while the world of cryptocurrencies was betting on Bitcoin. However, an unexpected development occurred. Once called “digital gold,” Bitcoin was overtaken by real gold.

Over the past five years, Bitcoin had outperformed gold with gains exceeding 1,000%, repeatedly holding the position of the top asset of the year. But in 2025, the scenario flipped 180 degrees. Gold has risen more than 50% since January, while Bitcoin has only increased by 15%. Investors who had held gold early on smiled contentedly, while elite traders in the crypto industry could only remain silent.

Even more intriguing is that gold and Bitcoin began to show completely opposite price movements. When gold rises, Bitcoin falls, and when Bitcoin falls, gold rises, revealing a clear inverse correlation. This “fate divergence” between digital assets and physical assets has raised profound questions among investors.

The Background of the Gold Buying Surge: Why Are Central Banks Flocking to Gold?

In 2025, who is the biggest buyer of gold? It’s not individual investors or institutional investors, but central banks around the world. In 2024, the net gold purchases by global central banks reached 1,045 tons, marking three consecutive years exceeding a thousand tons. According to data from the World Gold Council, Poland suddenly increased holdings by 18.66 tons, Kazakhstan by 15.65 tons, and China’s central bank steadily added 6.22 tons.

Comparing the gold reserve ratios of different countries reveals stark differences between developed and emerging markets. The U.S. holds 77.85% of its assets in gold, totaling 8,133 tons, far surpassing Germany’s 3,350 tons, Italy’s 2,452 tons, and France’s 2,437 tons. Meanwhile, China’s gold reserves account for only 6.7% of its total reserves but amount to 2,299 tons and continue to grow.

This comparison makes clear that there is still significant room for emerging markets to increase gold holdings. Even major economies like China have a gold reserve ratio below 7%, while Western advanced countries generally hold over 70%. This gap functions like a “remedial” push— the larger the gap, the stronger the motivation to catch up.

Surprisingly, central bank gold purchases have surged from less than 10% of total demand in the 2000s to 20%, becoming a key support for gold prices. Behind this shift is the recognition that the world is in turmoil, and the dollar can no longer be unconditionally trusted. The Russia-Ukraine conflict, tensions in the Middle East, US-China trade frictions, and other global instabilities are intensifying.

For years, the dollar was the core foreign exchange reserve for central banks and served as a risk-avoidance tool. But now, the U.S. itself faces challenges. With debt exceeding $36 trillion, reaching 124% of GDP, and increasing political instability, countries have realized they can freeze foreign currency reserves of other nations at will. The realization has spread that their own gold reserves are truly their own assets.

Gold does not generate interest, but it cannot suddenly “disappear” due to policies of specific countries. For individuals and nations, gold remains the ultimate refuge in times of risk.

Parallel Price Movements and the Reversal of Asset Correlations

Since 2025, dramatic changes have occurred in the correlation between Bitcoin and gold. According to Standard Chartered Bank, the correlation between Bitcoin and Nasdaq has now reached 0.5, down from 0.8 at the start of the year. Meanwhile, the correlation with gold is only 0.2, having once been zero earlier this year.

In other words, Bitcoin has become linked with tech stocks: when Nasdaq rises, Bitcoin rises; when Nasdaq falls, Bitcoin falls, diverging sharply from its original narrative as “digital gold.”

Under the Trump administration, the U.S. attitude toward Bitcoin shifted from “illegal heresy” to “a welcomed asset.” The approval of Bitcoin spot ETFs in 2024 officially integrated Bitcoin into the dollar system. While this was initially seen as positive, it also made it extremely difficult for Bitcoin to oppose the system once it became part of it.

Bitcoin’s initial appeal lay in its rebellious spirit—independent of government and central bank control, attracting many believers. But now, the situation has changed dramatically. Giants like BlackRock have become the largest buyers, and Bitcoin’s price fluctuations are entirely dependent on the Federal Reserve and Trump’s policies.

The True Nature of Digital Gold: A Shift Toward Tech Assets

Today, Bitcoin should be seen less as “digital gold” and more as a “digital technology asset.” Crypto traders have lost their independence, transforming into macro analysts who watch Powell’s and Trump’s statements late into the night.

From a consensus perspective, Bitcoin is still in the “what is this?” recognition stage in many parts of the world, while gold remains “something my grandmother’s grandmother loved.” The number of Chinese women holding gold bracelets and necklaces may outnumber all Bitcoin holders worldwide. Compared to gold, Bitcoin still has a long way to go in widespread adoption.

“Heavy Value” and “Light Value”: A New Asset Allocation Paradigm

Many are faced with choosing between gold and Bitcoin, but savvy investors understand that this is not about “either-or,” but about recognizing the roles both can play.

The ongoing surge in central bank gold purchases and the rapid rise in gold prices cannot continue indefinitely. Once gold reaches a certain level, issues related to physical storage, transportation, and delivery will surface. At that point, the true value of Bitcoin will become apparent.

Imagine a scenario: a conflict erupts in a country, and wealthy individuals realize that gold is too heavy, too conspicuous, and cannot be quickly transferred. In such cases, Bitcoin stored in hardware wallets becomes the optimal choice. Similar incidents have already occurred in Russia.

In short, gold is a “heavy store of value,” while Bitcoin is a “light store of value.” When gold prices reach very high levels and investors seek more affordable alternatives with similar properties, Bitcoin may gradually free itself from the influence of the dollar and U.S. politics, attracting capital inflows from gold and returning closer to its original role as “digital gold.”

The relationship between Bitcoin and gold should not be viewed as “which replaces which,” but as a process of “inheritance and evolution.” Gold is the record of accumulated human wealth, while Bitcoin is the new digital wealth of the era. An 70-year-old grandmother buying gold jewelry and a 25-year-old programmer holding Bitcoin—both coexist in a balanced asset portfolio.