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Author: Anthony Pompliano, founder and CEO of Professional Capital Management; Translation: Bitcoin Vision xiaozou
As capital allocators try to clarify the world’s landscape, all eyes are focused on gold and Bitcoin.
The market consensus in 2025 is that although gold is a high-quality asset, its offensive nature is weaker than its defensive nature – this is where Bitcoin comes into play.
This decentralized asset is positioned as “digital gold”, or as I have previously called it, “gold with wings”.Its core logic is:Bitcoin not only has the same stable currency attributes as precious metals, but also has unique advantages (including limited supply, halving mechanism and relatively short development history) that are expected to continue to outperform gold..
However, this expectation in 2025 has not been realized.
In fact, gold rose by about 60% during the year, its best performance in nearly half a century.Charlie Bilello, chief market strategist at Creative Planning, noted: “Gold has become the best-performing major asset class over the past 20 years, with annualized returns of over 11%.”
Such performance (especially in the past 11 months) has driven the central bank’s proportion of gold reserves to rise significantly.”Gold now accounts for more than 20% of global central bank reserves, the highest share in nearly three decades,” Charlie wrote.
Central bank demand is key because it has successfully offset the impact of continued net selling of gold and silver by U.S. retail investors since the sharp rise in prices in March 2024.
But what confuses many investors is that Bitcoin and gold have historically been closely linked: when gold prices rise, Bitcoin usually follows suit about 100 days later.These two types of assets have jointly benefited from macro trends such as rising national debt, disordered monetary policy, and geopolitical uncertainty.Faced with these challenges, investors tend to allocate a larger proportion of their investment portfolios to sound money assets—that is, assets that are outside the traditional system and have the characteristics of being non-increasing.
So why has gold reacted to recent global developments while Bitcoin has lagged?Is it just because the central bank has abundant funds and these large amounts of capital have not been allocated to Bitcoin, thus pushing up the price of gold?
This is indeed part of the reason.But there are more subtle factors behind it.Most people are overly focused on gold’s outperformance, but ignore Bitcoin’s relative weakness.
Joe Carlasare pointed out that the current Bitcoin bull market has experienced much slower growth than previous bull markets.We didn’t see the spectacular gains we expected, which means the market lacked a run to the top driven by retail frenzy.
If you have ever purchased Bitcoin for speculative purposes, especially if your most attractive feature was its seemingly asymmetrical earning potential, you are now deeply disappointed.I totally understand this feeling – Bitcoin has really failed to live up to that promise so far this cycle.
But if you view Bitcoin as a defensive asset against currency debasement and runaway inflation, then you should be pleased with its performance.Bitcoin has increased by approximately 1,500% since January 2020, and will increase by more than 18% in 2025.
Bitcoin’s past asymmetries stem from the high level of risk taken by investors.Risks and rewards always go hand in hand.But today Bitcoin is no longer a high-risk asset: it is clearly not going away, governments are not going to outlaw it, and it will eventually find its way into the portfolios of all sophisticated investors.
So you should expect Bitcoin returns to be lower than in previous bull markets.This by no means diminishes its appeal, but rather means that Bitcoin’s rise is inevitable.Although it will take some time, Bitcoin will eventually become the top stored value asset on the global stage.Gold will develop simultaneously with Bitcoin. The two are not competitors, but “allies” against currency devaluation..
Coexistence is a boon to both asset classes.
But in the short term, this past weekend may have been a turning point.We are likely to witness a massive rotation of funds from gold to Bitcoin before the end of the year.
Joao Wedson pointed out:
“Bottom signals in the BTC/Gold ratio are extremely rare and typically occur during periods of high volatility and severe Bitcoin corrections – which we are currently experiencing.
The blue signal shows the current bottom and the normalized oscillator is basically screaming: ‘It’s time to sell gold and buy Bitcoin’.The green signal is stronger and appears when both indicators hit bottom at the same time. Historical data shows that such moments have created the best BTC/gold allocation opportunities.
I would like to say to institutional gold holders: If I were you, I would study this chart carefully.Bitcoin’s risk reward is more attractive than it is today, especially now that gold is in a frenzy.
Feel free to use this chart analysis, but please remember this moment – this may be a historic turning point for gold and Bitcoin.”
To sum up: gold will perform well in 2025, but past performance is no indication of future performance.We may be standing on the threshold of a major rotation from gold to Bitcoin.If this deduction comes true, Bitcoin may end the year with a brilliant rally..
