This year, investors have decisively chosen precious metals such as gold to protect against the potential erosion of the value of paper money, thereby marginalizing bitcoin. .
Gold is up nearly 70% since Jan. 1 and silver is up about 150%, far outpacing the largest cryptocurrency, which is down about 6%.
Analysts have attributed the rise to so-called “depreciation trading.” It is an investment strategy that involves purchasing assets perceived as a store of value and waiting for the fiat currency to depreciate or devalue. Depreciation, the result of ultra-accommodating monetary policies and a budget deficit, leads to a loss of purchasing power and increases the price of the asset.
Earlier this year, BTC bulls made some bold predictions, citing the devaluation trade as a key catalyst for their year-end predictions. However, Bitcoin’s rally abruptly ran out of steam above $126,000 in early October. It has since fallen back below $90,000.
Golden record gathering
Gold’s rally has been particularly remarkable from a technical analysis perspective, according to the Kobeissi Letter.
The metal has remained above its 200-day simple moving average, a widely followed long-term trend indicator that smooths price action over roughly nine months, for about 550 consecutive trading days. This is the second longest streak on record, trailing only the roughly 750 sessions that followed the 2008 financial crisis.
Yet Bitcoin bulls are not in sync. Crypto analysts expect the cryptocurrency to catch up with gold next year, true to its trend of recovering with a lag.
“Gold has been leading BTC for about 26 weeks, and its consolidation last summer matches Bitcoin’s hiatus today,” Lewis Harland, portfolio manager at Re7 Capital, told CoinDesk. “The metal’s renewed strength reflects a market that is increasingly pricing in further currency depreciation and fiscal stress through 2026, a backdrop that has consistently supported both assets, with Bitcoin historically responding with greater torque.”
The prediction market seems to align with this view. At the time of writing, traders at Polymarket have assigned a 40% probability that BTC will be the best performing asset next year, with gold at 33% and stocks at 25%.
