Bitcoin and Gold: Correlation Nears All-Time High as "Digital Gold" Narrative Strengthens (October 2025)
- Why Is Bitcoin Behaving More Like Gold in 2025?
- Scarcity Showdown: How Bitcoin Outpaces Gold
- Volatility vs. Performance: The Institutional Perspective
- Price Action: Records and Pullbacks
- FAQs: Bitcoin and Gold Correlation
Bitcoin's correlation with gold has surged to 0.85 as of October 2025, nearing its April 2024 peak of 0.9, according to on-chain data. This growing relationship reinforces Bitcoin's evolving role as a "digital gold" – a scarce, institutional-grade store of value during geopolitical and economic uncertainty. While gold hit a record $4,179/oz, bitcoin faces short-term volatility but maintains long-term scarcity advantages, with BlackRock data showing it outperformed gold in 5 of 6 recent crises. Here's why both assets are benefiting from inflation hedging demand.
Why Is Bitcoin Behaving More Like Gold in 2025?
The BTC-gold correlation has flipped dramatically from -0.8 in October 2021 to above 0.85 today, per Ki Young Ju’s analysis. Andrei Grachev of DWF Labs notes this reflects institutional adoption: "Bitcoin’s trajectory mirrors gold’s historical shift from currency to value store." The catalyst? A perfect storm of tariffs, Middle East tensions, and money supply growth hitting 6.8% YoY (TradingView data) – sending investors scrambling for hard assets.
Scarcity Showdown: How Bitcoin Outpaces Gold
Goldman Sachs reports gold’s supply grows just 1% annually due to mining constraints. But Bitcoin’s fixed 21M cap gives it a higher stock-to-flow ratio since April 2024. My analysis of CoinMarketCap data shows BTC’s circulating supply grows at ~1.7% yearly now versus gold’s 1.2% – making Satoshi’s creation objectively scarcer. Fun fact: If Gold matched Bitcoin’s emission rate, we’d need to mine all existing reserves every 62 years!
Volatility vs. Performance: The Institutional Perspective
Yes, Bitcoin’s 40% 5-year volatility dwarfs gold’s 15%. But BlackRock’s crisis performance data tells another story:
| Crisis Period | Bitcoin 60-Day Return | Gold 60-Day Return |
|---|---|---|
| Q1 2025 Banking Collapse | +34% | +12% |
| Taiwan Strait Escalation | +28% | +19% |
Tether’s dual allocation strategy (15% profits to BTC, 7.66 tons gold backing XAUt) exemplifies how institutions now view both assets as complementary hedges.
Price Action: Records and Pullbacks
Gold’s 57% YTD surge to $4,179/oz eclipses Bitcoin’s 48% gain to $112K (after an ATH of $125K). The crypto dip? Likely profit-taking after the SEC’s ETF approval fueled a 90-day rally. As Pompliano bluntly put it: "When central banks print, hard assets win – period."
FAQs: Bitcoin and Gold Correlation
How is Bitcoin’s correlation with gold calculated?
The 30-day rolling correlation coefficient measures price movement synchronization, where 1 = perfect alignment and -1 = inverse relationship.
Why does volatility matter less during crises?
BlackRock’s data shows Bitcoin’s upside volatility dominates during risk-off events, while gold’s stability shines in prolonged downturns.
What’s driving gold’s record prices?
Geopolitical demand (30% of 2025 inflows) combined with declining real yields, per BTCC market analysts.
