The global capital markets in 2025 staged an interesting show — Bitcoin, once regarded by many as digital gold, was instead heavily suppressed by traditional gold. The divergence in the trends of these two safe-haven assets is enough to make many investors rethink their asset allocation logic.

Let's look at the specific numbers first. Gold has increased by over 63% this year, and in the fourth quarter, it even broke the historical high of $4000 per ounce. Although Bitcoin also once reached six figures, it started to decline in the second half of the year, with the total increase for the year being less than half of gold's. From another perspective, the BTC to gold ratio fell from 40 ounces to 20 ounces, a 50% decline — which means you need to spend double the amount of money to exchange Bitcoin for gold.

Fund flows tell a more compelling story. Central banks continue to increase their gold holdings, with gold purchases reaching 254 tons in October alone. Institutional investors are not willing to fall behind either, with various gold ETFs increasing their holdings by 397 tons in the first half of the year. In contrast, the asset management scale of spot Bitcoin ETFs shrank from $152 billion to $112 billion, and long-term holders collectively sold over 500,000 coins. This ebb and flow of funds reflect a market reassessment of the two assets.

Why is this happening? The key lies in the differences in driving logic. In the current high-interest-rate environment, gold is rising against the trend because it demonstrates strong defensive power in the face of geopolitical risks and economic uncertainties, with its correlation to the stock market even dropping to -0.12. You can think of it as when the stock market falls, gold often rises — a true hedging tool.

Bitcoin, on the other hand, remains a high-risk asset, facing the pressure of high actual yields. Coupled with a decline in investors' risk appetite, its correlation with the US stock market remains high. Simply put, when the US stock market goes up, Bitcoin goes up; when it goes down, Bitcoin tends to fall even more.

Looking ahead, if liquidity easing truly arrives in 2026, Bitcoin might regain its vitality; but if geopolitical tensions continue to escalate, gold's defensive position will only become more solid. For investors, rather than obsessing over who is better, it’s more important to understand the roles each plays under different market conditions.