The year 2025 did not belong to Bitcoin enthusiasts, especially when compared with gold, which outperformed the world’s largest cryptocurrency by a wide
margin. While gold surged 70% this year, Bitcoin is down 6%, underscoring how bullion extended its bull run as crypto fell short of expectations. Even at a time when the geopolitical uncertainties continue to drag on, a condition that's considered conducive for Bitcoin, it failed to match the rally that gold achieved this year. Global tensions have remained elevated throughout the year, with fresh uncertainty stemming from Donald Trump’s unclear stance on Venezuela. For those who view Bitcoin as a hedge against government-led currency debasement, the developments could even be seen as supportive. The US budget deficit continues to widen, with the International Monetary Fund projecting that federal debt will rise from 125% of annual income to 143% by 2030, higher than the levels seen in Greece and Italy. Another factor that was quite supportive of Bitcoin was the tech advancement, particularly the AI revolution happening at a breakneck pace. At the same time, the regulatory environment has become more supportive. Crypto exchange-traded funds are now being offered by major financial institutions, and even the traditionally cautious UK financial regulator has proposed rules to regulate large parts of the crypto market. According to a report in the Guardian, this may also explain part of the shift in sentiment. Bitcoin has become less exciting now that it is part of the financial mainstream. When firms like JP Morgan and BlackRock describe bitcoin as a regular asset class, some of its earlier sense of disruption fades. Interest levels reflect this change, with Google searches for “bitcoin” remaining steady rather than surging. Gold and bitcoin moved in different directions from October, when bitcoin saw a sharp sell-off. What exactly triggered the fall on October 10 is still debated, but heavy selling by leveraged Bitcoin investors in a weak market, following a tariff threat by Donald Trump against China, played a role, the report said. Unlike stocks and precious metals, Bitcoin did not recover after the fall. Over the next six weeks, the overall crypto market lost more than $1 trillion in value. Bitcoin fell from a peak of about $126,000 in early October to around $87,000 now, the report added. In contrast, as of late December 2025, the worldwide gold rate is surging past $4,400 to over $4,500 per ounce, hitting record highs driven by falling interest rate expectations, geopolitical risks. According to a research note by Deutsche Bank last month, several factors contributed to the decline. These included a general shift by investors away from risky assets, signals from the US Federal Reserve that interest rates could stay high, slower-than-expected progress on crypto regulation, low trading volumes, money flowing out of institutional investments, and profit-taking by long-term bitcoin holders. Deutsche Bank said it is still unclear whether Bitcoin will stabilise after this correction. Unlike earlier crashes driven mainly by retail investors, this fall happened at a time when large institutions were also involved and global economic conditions were changing. Supporters of bitcoin continue to see every drop as a buying opportunity, pointing to its past recoveries. However, this year suggests a shift in investor behaviour. When investors looked for safety, they chose gold and silver, which performed even better - over bitcoin. As the year ends, questions remain about how deep and resilient the Bitcoin market really is, with the excitement around cryptocurrencies appearing weaker than before. (Disclaimer: This article is meant solely for informational and educational purposes. The views and opinions expressed are those of individual analysts or brokerage firms and do not reflect the stance of Times Now. Readers are advised to consult certified financial experts before making any investment decisions.)
