Bitcoin vs. Gold: A Battle Shaped by Macroeconomic Forces
Bitcoin’s underperformance relative to gold in 2025 is raising eyebrows among analysts, with some suggesting that it signals a broader macroeconomic pivot. Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, believes the trend could reflect growing market concerns over deflation and a looming recession. Meanwhile, gold prices are surging and ETF flows are diverging, adding more complexity to the outlook.
Bitcoin-to-Gold Ratio Flashes Reversal Signal
Earlier in May, the Bitcoin-to-gold ratio peaked at 33x—indicating that one Bitcoin was worth the equivalent of 33 ounces of gold. McGlone sees this high as a potential turning point. If deflation takes hold and equity markets weaken, investors could favor traditional safe havens like gold.
“The recession that didn’t materialize in 2023 may yet arrive,” McGlone warns, suggesting the S&P 500 could slide to 4,000, gold could climb to $4,000, and Bitcoin may correct to $40,000—bringing the Bitcoin-to-gold ratio down to 10x.
Historically, Bitcoin’s strength relative to gold has been linked with bullish equity markets. If the S&P 500 loses steam, Bitcoin may lose its edge as a high-beta risk asset.
Inflation vs. Deflation: The Asset Divergence
Bitcoin has traditionally thrived in inflationary environments—fueled by loose monetary policies and abundant liquidity. However, a pivot toward tighter conditions and economic contraction could bolster gold’s role as a safe-haven asset, at the expense of Bitcoin.
Contrasting opinions exist. Financial author Robert Kiyosaki suggests that a market crash could prompt capital to rush into Bitcoin—not gold—positioning BTC as a modern-day safety net. As of the latest data, Bitcoin is trading at $105,380, showing a mild 1.33% uptick in the last 24 hours, with trading volume increasing 4.91% to $43.5 billion.
Gold Surges as Dollar Weakens, but ETF Data Tells Another Story
Between May 29 and June 2, gold prices surged 3%, hitting a three-week high, while Bitcoin maintained its position above $105,000. The rise in gold coincided with a significant drop in the U.S. Dollar Index (DXY), which hit a six-week low. A weaker dollar often drives investors toward alternative assets.
Federal debt concerns are escalating. U.S. Treasury Secretary Scott Bessent recently remarked that the country is “on the warning track,” following proposals to raise the debt ceiling by another $4 trillion. With over $31.2 trillion in outstanding debt, investors may begin reallocating capital away from the dollar into assets like gold and Bitcoin.
Could the U.S. Favor Bitcoin Over Gold?
Despite holding the world’s largest gold reserves, the U.S. is not among the top producers. That, combined with geopolitical tensions and trade rivalries, may reduce the incentive to support rising gold prices.
There’s growing speculation that the U.S. may diversify into Bitcoin. A hypothetical $171.8 billion Bitcoin investment—just 17% of U.S. gold reserves—could make the country the largest holder of BTC, overtaking China’s estimated 190,000 BTC stash. This speculation gained traction after President Donald Trump signed the Strategic Bitcoin Reserve Executive Order in March 2025.
ETF Flows Highlight Changing Investor Sentiment
Even as gold prices rise, ETF data shows net outflows from gold, suggesting declining investor confidence. In contrast, spot Bitcoin ETFs have seen $3 billion in inflows since May 15, signaling growing optimism around Bitcoin’s near-term potential.
With a $22.7 trillion market cap, gold remains a behemoth—yet its growth ceiling is arguably lower than that of Bitcoin, whose $2.1 trillion market cap still suggests significant room to grow.
