Author: Liam, Deep Tide TechFlow

Do you remember the end of 2024, when everyone was writing asset predictions for 2025?

Stock investors were focused on the S&P and the A-shares, while those in the crypto circle were betting on Bitcoin.

But if someone had told you that the best-performing asset in 2025 would not be Bitcoin or stocks, but rather the "old antique" gold that Generation Z despises, you would have thought they were joking.

But reality is indeed magical.

In the past five years, Bitcoin has outperformed gold by over 1000%, repeatedly topping the list of the strongest assets of the year. However, by 2025, the script had completely flipped: gold had risen over 50% since January, while Bitcoin had only increased by 15%.

The early buyers of gold were laughing, while elite traders in the crypto industry fell silent.

Even more bizarrely, gold and Bitcoin seemed to enter a parallel world: when gold rises, Bitcoin falls; when Bitcoin falls, gold rises.

On October 21, gold suffered a heavy blow, dropping 5% in a single day, while Bitcoin surged as if it had been injected with adrenaline, reversing its downward trend and starting to rise…

Why has Bitcoin, touted as digital gold, become unanchored from physical gold?

Buying Gold in Turbulent Times

In 2025, who are the most fervent buyers of gold? Not retail investors, not institutions, but central banks around the world.

Data doesn't lie: in 2024, global central banks net purchased 1,045 tons of gold, breaking the 1,000-ton mark for three consecutive years.

According to the World Gold Council's Q2 2025 data, Poland increased its holdings by 18.66 tons, Kazakhstan followed closely with an increase of 15.65 tons, and the People's Bank of China steadily added 6.22 tons…

Why are developing countries the ones increasing their gold holdings?

Look at the proportion of gold reserves held by various central banks; developed and developing countries are in completely different worlds:

The U.S. has 77.85% of its asset reserves in gold, holding 8,133 tons, far ahead of second-place Germany with 3,350 tons, followed by Italy and France, which hold 2,452 tons and 2,437 tons, respectively.

The People's Bank of China's gold reserves account for only 6.7% of its total asset reserves, but the absolute amount has reached 2,299 tons and is continuously increasing.

This comparison is striking; emerging market countries still have significant room to increase their gold holdings. Economies like China have gold reserves that account for less than 7%, while developed countries in Europe and America generally exceed 70%. It's like a "catch-up" game; the greater the gap, the stronger the motivation to catch up.

Exaggeratedly, the proportion of central bank gold purchases in total demand has skyrocketed from less than 10% in the 2000s to 20%, becoming an important support for gold prices.

Why have central banks suddenly become so obsessed with gold? The answer is simple: the world is chaotic, and the dollar is no longer trustworthy.

The Russia-Ukraine conflict, the situation in the Middle East, and Sino-U.S. trade frictions… the global village has descended into a warring states period.

For a long time, the dollar has been the core foreign exchange reserve for central banks, also serving as a safe haven. But now, the U.S. is preoccupied with its own issues, with a staggering $36 trillion in debt, a ratio of debt to GDP reaching 124%, and the Trump administration's erratic policies creating external enemies and internal divisions…

Especially after the outbreak of the Russia-Ukraine conflict, when the U.S. can freeze other countries' foreign exchange reserves at will, nations have realized: only the gold stored in their own safes is truly their wealth.

Although gold does not earn interest, at least it won't suddenly "disappear" due to the policies of a particular country.

For both individuals and nations, gold serves as a risk hedge; the more chaotic the world becomes, the more gold is pursued. However, when news like "the Russia-Ukraine conflict may be coming to an end" emerges, a drop in gold prices is also understandable.

Digital Gold or Digital Tesla?

The most awkward asset in 2025 may be Bitcoin, whose long-term narrative is "digital gold," yet it has turned into "digital Tesla."

Data from Standard Chartered shows that Bitcoin's correlation with the Nasdaq is now as high as 0.5, even reaching 0.8 at the beginning of the year. And its correlation with gold? A pitiful 0.2, which even dropped to zero at one point earlier this year.

In plain terms: Bitcoin is now tied to tech stocks; when the Nasdaq rises, it rises, and when the Nasdaq falls, it falls.

Everything has its cause and effect.

Under the Trump administration's influence, the U.S. attitude towards Bitcoin shifted from "illegal cult" to "welcome aboard." The approval of Bitcoin spot ETFs in 2024 marked Bitcoin's formal incorporation into the dollar system.

This was initially a good thing, proving Bitcoin's legitimate status. But the problem is, once you become part of the system, it becomes difficult to resist it.

Bitcoin's initial allure lay in its rebellious spirit, not relying on any government or being controlled by any central bank.

But now? Wall Street giants like BlackRock have become the largest buyers in the market, and Bitcoin's price fluctuations are entirely dependent on the Federal Reserve and Trump, to the point where crypto traders now have to stay up late listening to Powell and Trump, effectively turning themselves into macro analysts of the dollar.

In terms of consensus, Bitcoin is still in many parts of the world at the stage of "what is this thing," while gold is already at the level of "my grandmother's grandmother also likes it."

The gold bracelets and necklaces of Chinese aunties may have more holders than all Bitcoin HODLers combined.

Compared to gold, young Bitcoin still has a long way to go in its evangelism.

Left Hand Gold, Right Hand Bitcoin

Many people like to choose between gold and Bitcoin, but savvy investors know this is a fill-in-the-blank question.

Although central banks around the world are frantically buying gold, causing gold prices to soar, this process cannot continue indefinitely. When gold prices reach a certain level, issues related to the storage, transportation, and delivery of physical gold will arise, at which point Bitcoin's advantages will become apparent.

Imagine a specific scenario: a war breaks out in a country, and the wealthy find gold too heavy and conspicuous to quickly transfer their wealth. At this moment, Bitcoin in a hardware wallet becomes the best choice; such an event has already occurred in Russia.

In simple terms, gold is "bulky value storage," while Bitcoin is "lightweight value storage."

If gold prices reach a terrifyingly high level, funds will seek similar alternatives that are cheaper. In this case, Bitcoin has the opportunity to gradually break free from the gravitational pull of the dollar and Trump, gaining the overflow of funds from gold and moving closer to being "digital gold."

In summary, the relationship between Bitcoin and gold should not be understood as one replacing the other, but rather as inheritance and evolution.

Gold is the wealth memory of human civilization, while Bitcoin is the wealth imagination of the digital age.

70-year-old Aunt Li buys gold jewelry, while 25-year-old programmer Li Xiaoming hoards Bitcoin; everyone has a bright future.

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