Bitcoin can still be XEM "digital gold" if evaluated over the long term, rather than based solely on its performance over a single year.
Debate has erupted over Bitcoin underperforming gold in 2025, amid cautious sentiment following the sharp October drop and concerns that the four-year cycle could extend into 2026. Crypto ETF inflow data and the BTC/gold ratio are becoming key metrics for examining the relative strength of crypto.
- Eric Balchunas argues that using one-year yields to dismiss "digital gold" is unconvincing.
- In 2025, Bitcoin is down 6% while gold is up 65%, widening the performance gap.
- Spot Bitcoin ETF flows in the US weakened, while gold ETFs rebounded strongly, putting further pressure on BTC.
Bitcoin still holds the "digital gold" argument when viewed from a cyclical perspective.
Evaluating Bitcoin as "digital gold" is more reasonable when XEM over multiple years and in terms of cycles, as Bitcoin typically only significantly underperforms gold during bear market years.
Bloomberg's senior ETF analyst, Eric Balchunas, defended the view that Bitcoin is "digital gold," even though the asset is expected to underperform physical gold in 2025. He responded to strategist Marion Laboure's (Deutsche Bank) assertion that "BTC is no longer digital gold" with an argument focused on the representativeness of yearly data.
“This is a plausible argument, but using the yield of just one year as a benchmark is illogical. Does that mean it was digital gold in 2023 and 2024 when it rose 450%? But now it's not, just because gold is better in 2025. Please explain that logically.”
– Eric Balchunas, Senior ETF Analyst at Bloomberg, X post
According to the original data, Bitcoin ended 2025 down 6%, while gold rose 65%, its highest annual yield in over 10 years. BTC 's underperformance became clearer after the October crash, and concerns about the "four-year cycle" continue to weaken expectations for 2026.
When "zooming out," Balchunas's argument is based on a 2012 picture: BTC only significantly underperformed gold during bear market phases. In years of sharp declines like 2014, 2018, and 2022, gold outperformed BTC by approximately 50–70%, as described in the original text. Conversely, in the remaining 10 years, BTC outperformed gold with double- to triple-digit annual gains.
Weakening inflows from Spot Bitcoin ETFs may be dragging BTC down.
Weak demand from US spot Bitcoin ETFs may be amplifying short-term BTC weakness, especially as gold ETF inflows rebound strongly.
The original text indicates that demand for the “ETF complex” for the Spot BTC ETF in the US turned negative in November and has not recovered as of February 2026. This development is mentioned along with a link to track money flow: compare ETF money flow . When ETF demand becomes “muted,” selling pressure or lack of support could cause BTC to decouple from gold.
Conversely, gold ETFs were described as "falling to zero" in December but then saw renewed demand, boosting inflows to $10 billion. If Bitcoin ETF inflows don't soon turn positive and narrow the gap with gold, the divergence could continue to signal unfavorable prospects for crypto assets in the short term.
The BTC/gold ratio is approaching a key support zone.
The BTC/gold ratio shows that Bitcoin has been relatively weak against gold since late 2024, but is moving towards a support zone that appeared during the 2022 bear market.
According to the original text, the BTC/gold ratio (a measure of relative performance) peaked in late 2024, reaching the equivalent of 40 ounces of gold. The bullish structure was broken in October after the ratio breached the support trendline.
At the time mentioned in the original article, the ratio was at 13, down nearly 70% from its peak. The accompanying interpretation is that gold has outperformed BTC by about 70% since the end of 2024. However, recent history shows that a similar decline in the 2022 bear market stalled around 9, so this area is XEM a support level to watch for a potential reversal.
Conclude
Data for 2025 strongly favors gold, but labeling Bitcoin as “digital gold” typically requires a timeframe longer than one year. In the short term, weak and divergent inflows from Spot Bitcoin ETFs against gold ETFs are key variables. Technically speaking, the BTC/gold ratio is near a support zone seen in 2022, which could determine the next move.
Frequently Asked Questions
Why isn't one year underperforming compared to gold enough to conclude that Bitcoin is no longer "digital gold"?
Because Bitcoin fluctuates cyclically and typically only significantly outperforms gold during bear market years, and looking back to 2012, there have been many years where BTC strongly outperformed gold. Therefore, using one-year yields to refute the entire argument is unrepresentative.
How will Bitcoin and gold perform in 2025?
According to the original text, Bitcoin is projected to end 2025 down 6% while gold will rise 65%. This is one of the reasons why the debate over "Is BTC still digital gold?" has become so heated.
What does the flow of Spot Bitcoin ETF funds in the US indicate?
The original report notes that the cash flow of the US Spot BTC ETF group turned negative from November and has not recovered until February 2026. Weak cash flow could reduce demand, contributing to BTC underperforming compared to gold in the short term.
What is the BTC/gold ratio and which levels are attracting attention?
The BTC/gold ratio measures the relative strength of Bitcoin against gold. The original article states that the ratio once reached 40 (late 2024) and then fell to 13, while the area around 9 is XEM a support level that appeared during the 2022 bear market.
