Bitcoin crash: Where investors are fleeing as ‘internet’s gold’ takes an almighty tumble
As the diehard crypto advocates rally to “buy the dip” after a catastrophic month, there’s another trend emerging as the world goes through the tumble dryer.
Bitcoin’s brutal month has continued to rattle the cryptosphere and investors are scurrying to the hills.
For the perpetual crypto skeptics, it’s a gleeful period indeed. Economic traditionalists, particularly those with heavy investment in the banking sector, have spent years trashing Bitcoin and the entourage of its wacky spin-offs.
The pro-crypto crowd is predictably shrugging-off the latest crash-and-burn, urging their peers to capitalise on low prices and “buy the dip”.
But as the die-hards rally, there’s another interesting trend emerging. A silly little thing called gold.
For years, a growing distrust of traditional economic systems has pushed investors toward assets outside government control. The scepticism intensified after the global financial crisis, creating fertile ground for new forms of money. In Bitcoin’s early days, it was celebrated as a radical alternative, a decentralised currency free from central banks, political agendas, or Wall Street.
Just like gold, no single authority could print it, freeze it, or manipulate it. At least not as easily as the fiat currency we currently operate under.
That promise helped Bitcoin explode in popularity as the “internet’s gold”.
But in 2025, it’s a much different story. As institutional money poured in, Bitcoin became mainstream and therefore far more sensitive to the same economic forces and liquidity cycles it was created to escape.
Gold, on the other hand, has always been a steady rock to anchor to in the storm.
Fans of both assets have argued for years about which one truly protects wealth. But the market action in 2025 suggests the relationship is far from straightforward.
Bitcoin has dropped nearly 25 per cent this month, hitting a low near $123,165 last Friday before recovering to around $131,580. Across the wider crypto universe, about $1.836 trillion in value has evaporated in just six weeks, according to CoinGecko. This downturn has been driven largely by spot selling, including big ETF redemptions, dormant wallets waking up and unloading coins, and a loss of interest from momentum traders, Bloomberg reports.
Naturally, those with the most to lose in the recent crash are the most optimistic about the future.
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Speaking this week, Binance CEO Richard Teng claimed the recent drop in Bitcoin is largely the result of “investor deleveraging and broader market risk aversion, trends also seen in other asset classes,” describing the slump as “a healthy consolidation phase for the crypto industry.”
Kunal Shah, Head of Commodity Research at Nirmal Bang, echoed those sentiments and argued that Bitcoin now reflects global liquidity conditions more than anything else.
“Generally, when the fixed-income market witnesses such turbulence, there is a flight of capital from risk to safety. And that is what is happening. And that is the main reason why Bitcoin has collapsed the way it has collapsed,” he said via LiveMint.
“Bitcoin is a mirror and a reflection of the global liquidity scenario.”
Given the panic in crypto, you might assume gold would be soaring, but analysts say the metal has already surged well ahead of its fundamentals.
Shah says that gold prices have run up so aggressively that, based on fundamentals, “it should have been trading at A$6,120.”
Instead, he sees limited upside in the short term.
“We believe that gold is likely to consolidate further, and the upside is going to be very restricted in the near term … it is likely to consolidate and correct or witness some more profit-taking going forward,” he continued.
On Monday morning, MCX gold futures slipped nearly one per cent, as expectations for Federal Reserve rate cuts fade and the US dollar strengthens. It comes after a massive 50 per cent rally in 2025, leaving gold bulls temporarily exhausted.
Rachael Lucas, Crypto Analyst at local Australian crypto currency exchange BTC Markets, offers a different perspective on the gold-bitcoin link.
“Honestly, the link is more myth than reality. Over the past five years, the correlation between gold futures and Bitcoin has hovered around 0.44, weak at best,” she told news.com.au
“They don’t move in lockstep because their drivers are worlds apart: gold rallies on central bank buying, geopolitical tension and de-dollarisation; while Bitcoin dances to the tune of tech sentiment, ETF flows and retail hype.
“Yes, they briefly aligned during the inflation scare of 2022–2024, but 2025 blew that apart, gold up 50-60 per cent yeat to date, Bitcoin flat or worse.
“Both are pitched as “anti-fiat” plays, but in practice, regulatory shocks and liquidity cycles make their relationship more coincidence than causation.”
Why is gold surging?
Despite detractors and “investment experts” saying it’s an unwise long-term asset, gold became a standout performer of 2025.
The ancient asset proved those sentiments wrong with one of its most dramatic rallies in modern history, outpacing nearly every major asset class as global uncertainty over geopolitics, international conflict and tariffs surges.
After years of moving sideways, the metal has exploded higher, rising more than 50 per cent this year and repeatedly setting new record highs.
What was once considered the safest but dullest corner of the market has suddenly taken centre stage, leaving even seasoned investors surprised by the speed and scale of the surge.
Central banks around the world have been buying aggressively, expanding their reserves at the fastest rate seen in decades.
At the same time, expectations of interest-rate cuts — particularly from the US Federal Reserve — have boosted demand. And as inflation cools and the path to monetary easing becomes clearer, non-yielding assets like gold become comparatively more attractive.
While crypto’s decline is not the sole reason behind gold’s rally, it has reinforced the metal’s reputation as a stabilising asset at a time when confidence in speculative markets has been shaken.
Still, nobody can tell for sure what’s next.
Gold forecasts for the year ahead vary widely, with optimistic analysts seeing potential for it to climb toward the $6,120 to $6,885 range, while those taking a more cautious view warn that a stabilising global environment could pull prices back toward $5,355.
