Gold Surges as Bitcoin Declines Amid Market Uncertainty in 2025
In 2025, gold rose approximately 70% while bitcoin fell about 6%, reflecting a significant divergence in investor preferences. The decline in bitcoin was particularly pronounced after October, when leveraged bitcoin holders sold into a thin market following a tariff threat from then-President Trump toward China. Over six weeks, the crypto market lost more than $1 trillion, with bitcoin prices dropping from roughly $126,000 in early October to about $87,000 by year-end.
Deutsche Bank identified five factors contributing to bitcoin's decline: a broader risk-off market mood, hawkish signals from the Federal Reserve, weaker regulatory momentum, thin liquidity and outflows from institutional investors, and profit-taking by long-term holders. Despite these challenges, regulatory and mainstream adoption dynamics continued to strengthen crypto exposure, with crypto ETFs introduced by mainstream financial institutions and UK regulatory proposals aimed at overseeing parts of the crypto market.
Bitcoin is increasingly seen as a more conventional asset by mainstream investors, with firms like JPMorgan and BlackRock treating it as part of a regular asset class. However, public interest indicators, such as Google searches and activity from influential figures like Elon Musk, have cooled. This shift in sentiment also corresponded with a move in demand toward defensive hedges such as gold and silver, further explaining the divergence between gold’s strong performance and bitcoin’s decline.
As the year closed, questions remain regarding the depth of the bitcoin market and its imitators, as the speculative buzz surrounding cryptocurrencies has waned, highlighting the evolving nature of investor strategies in 2025.
