The truth is not at all what you think it is
Sisters! Who would have thought the market in 2025 would be so magical? On one side, gold is surging past historical highs, breaking $4380/ounce, and my social circle is filled with people flaunting their gold profits; on the other side, our familiar Bitcoin is being rubbed into the ground, with capital outflows hitting a four-year high. At the end of last year, Bitcoin could be exchanged for 40 ounces of gold, but this year it has been cut in half, and now 1 can only be exchanged for 20 ounces. Who wouldn't feel heartbroken seeing this disparity?
Many people have been asking me, wasn't Bitcoin supposed to be 'digital gold'? Why is it that when it comes to hedging, capital instead rushes into the old antique gold? Today, I'm going to share from the heart about the truth behind this, which may overturn all your understanding. Don't be fooled by the story of 'digital gold' anymore!
First, I must debunk a misconception: the surge in gold this year is not simply a 'safe haven' phenomenon, but rather the confidence built with real money stacked by central banks around the world! Did you know? By the end of October, central banks worldwide had already purchased 254 tons of gold, with the Polish central bank alone buying 83 tons, leading the world. This is not retail investors following the trend; it’s a strategic allocation at the national level!
Why do central banks favor gold so much? Simply put, after experiencing previous geopolitical conflicts and sanctions, everyone has realized: money stored in foreign banks can be frozen, but gold stored in your own vault is something no one can take away! This sense of 'no counterparty risk' is something Bitcoin cannot provide. No matter how strong Bitcoin is, its trading still relies on networks and markets, and in extreme situations, it can just be cut off; gold is real hard currency, and the value consensus built over thousands of years cannot be compared to a few decades of digital assets.
Looking at Bitcoin, the narrative of 'digital gold' has completely collapsed this year! I've said long ago that Bitcoin is essentially still a high-volatility risk asset, too correlated with stocks. This year, when the global economy tightened, the first assets to be sold off were those 'storytelling' assets. You can see from the data that the funds for Bitcoin spot-related products fell from a peak of $152 billion in July to $112 billion in just five months, and those long-term players who were previously steadfast sold off over 500,000 coins in the second half of the year. This is not a small-scale exit; it's a vote with their feet!
Some may say, aren't large institutions still increasing their holdings? For instance, a certain media company bought 150 coins, and a certain founder's holdings are approaching 680,000 coins. But sisters, these are just the personal choices of a few giants and do not represent the entire market! It's like a group of people retreating, and a few counter-cyclical bottom-fishers do not represent that the entire group will turn back. Last week, the digital asset market saw an outflow of $952 million in one week, a record high in four years; this is the true panic-driven risk aversion of the market, and Bitcoin is not considered a 'safe option' at all.
Another truth you may not have noticed: this year's rise in gold cannot even be suppressed by interest rates! Logically, when interest rates are high, holding non-yielding gold isn't cost-effective, but this year, even with interest rates lingering low and the Federal Reserve slow to cut rates, gold still rose by 63%. What does this indicate? The market has too little confidence in the future economic outlook, preferring to hold non-yielding gold rather than touch any risky assets, including Bitcoin.
Lastly, let me say something heartfelt: as someone who has been deeply involved in the crypto market for many years, I find Bitcoin's performance this year very distressing, but we must view it rationally: Bitcoin is still too young, the market structure is too fragile, and large funds panic at the slightest withdrawal. In contrast, gold, after hundreds of years of accumulation, has central bank backing and global consensus; it has long become the 'last safe haven' for capital.
So the gold crushing Bitcoin in 2025 is definitely not a coincidence, nor is it that gold suddenly became appealing; it's that in the face of true uncertainty, capital has finally seen clearly: the so-called 'digital gold' can never replace real gold. Moving forward, the market will continue to differentiate, sisters, don't blindly bottom-fish; first understand the flow of capital before taking action!
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