Bitcoin sliding to a record low against gold in January dragged an old argument back into the open. Again.
Is Bitcoin actually “digital gold”?
Or is it just a high-beta liquidity trade that getss smoked whenever money tightens?
I’ve seen this debate resurface every cycle, and it never shows up quietly. It always comes back when one side looks embarrassingly wrong.
Right now, that side is Bitcoin.
What Actually Broke — And Why People Noticed
Bitwise Europe flagged something that’s hard to ignore. Whenn you adjust Bitcoin’s price against gold for global money supply, the relative valuation is sitting near an extreme. We’re talking close to a -2 Z-score deviation. That’s rare territory.
Not “interesting.”
Rare.
In past cycles, when Bitcoin sank this far relative to gold, it usually didn’t hang around for long. Those zones tended to form near major bottoms. The kind people only recognize later, when it’s already uncomfortable to buy.
The obvious comparison everyone keeps reaching for is 2015. Post-Mt. Gox. Volume was dead. Confidence was worse. Bitcoin traded around $165 and was treated like a failed science project. When the BTC/gold ratio hit similar lows back then, the rebound didn’t show up immediately—but it was violent when it arrived.
Within two years, Bitcoin was flirting with $20,000.
That’s the backdrop behind Michaël van de Poppe’s claim that today’ss setup looks more attractive than 2017 ever did. Back then, you weren’t early. You were late and euphoric.
This feels different.
Why This Time Isn’t Just “Bitcoin Is Cheap”
Here’s the part most people gloss over.
Bitcoin isn’t just weak.
Gold is freakishly strong.
Gold prices have roughly doubled over the past year. Central banks are buying. Geopolitics hasn’t cooled. Fiscal discipline is still a punchline. Gold is doing exactly what it’s supposed to do when the world feels brittle.
Bitcoin, meanwhile, is down about 18% over the same stretch.
That divergence matters. A lot.
The BTC/XAU ratio isn’t collapsing because Bitcoin imploded. It’s collapsing because gold is being treated like the adult in the room.
And that complicates the usual “rotation” story.
For capital to rotate out of gold and into Bitcoin, gold holders have to want to sell. Or at least trim. Right now, I don’t see that urgency. When uncertainty stays elevated, people cling to what feels boring and reliable. Bitcoin’s volatility stops looking edgy and starts looking irresponsible.
The Rotation Thesis Sounds Good. Timing Is the Problem.
Yes, I’ve read the calls.
André Dragosch. Pav Hundal. February or March. Gold peaks, Bitcoin wakes up, capital rotates, charts look obvious in hindsight.
The logic is familiar. Gold runs first during stress. Risk assets follow when things stabilize. Bitcoin usually benefits when real yields compress and liquidity eases.
But that whole chain depends on gold stalling.
If gold keeps acting like the preferred hedge, the rotation clock doesn’t start. It just gets delayed. Again.
The Skeptics Aren’t Saying “Wrong.” They’re Saying “Too Early.”
Benjamin Cowen’s take is more restrained—and honestly, more consistent with what I’m seeing.
He’s not arguing that Bitcoin isn’t undervalued relative to gold. He’s arguing that undervaluation doesn’t force an immediate snapback. Especially not in a world where equities are holding up, precious metals are bid, and liquidity is still tight.
In that environment, Bitcoin doesn’t have to crash.
It just bleeds sideways.
And the BTC/gold ratio can stay depressed far longer than people expect. Extreme readings don’t guarantee reversals. They only tell you the long-term math is starting to shift.
That’s an uncomfortable truth most traders don’t like sitting with.
The Narrative Problem Nobody Wants to Admit
There’s another layer here, and it’s not technical.
Gold is currently doing the thing Bitcoin was marketed to do.
That stings.
When analysts start saying gold is “acting like the hedge Bitcoin promised to be,” that’s not a throwaway line. That’s a credibility issue. Bitcoin’s hedge narrative works best when liquidity is abundant and trust in institutions is eroding—but not collapsing.
In early stress phases, money runs to gold. Later, when fear fades into opportunism, Bitcoin tends to outperform.
If that cycle still holds, Bitcoin isn’t broken. It’s just early. Again.
On-Chain Data Tells a Calmer Story
Here’s where I stop doom-scrolling macro takes and start paying attention.
Long-term holders are accumulating.
Addresses holding Bitcoin for more than 155 days increased supply during January’s selloff. At the same time, long-term holder spending dropped. Less distribution. Less panic.
That pattern shows up near real bottoms more often than not.
I remember a similar setup after the April 2025 lows. Long-term holder supply turned up first. Price followed about a month later. Roughly a 60% bounce from the lows.
No metric is magic. But when relative valuation extremes line up with patient capital stepping in, I stop dismissing the move as “just another dip.”
Why This Cycle Refuses to Behave Like 2015
Here’s the uncomfortable part.
This isn’t 2015. Or 2019.
Rates are higher. Real yields are positive. Bitcoin trades like a macro asset now, not a niche experiment. It’s entangled with equities, derivatives desks, and cross-asset positioning.
Over long horizons, Bitcoin still behaves like digital gold. Over short ones, it behaves like a leveraged bet on liquidity.
Both can be true. That dual personality is exactly why these signals matter—and why they take longer to resolve.
What I’m Watching Before Calling a Rotation
I’m not betting on the BTC/gold ratio alone. I’m watching for confirmation.
Specifically:
– Gold stalling or chopping instead of grinding higher
– Financial conditions loosening, not just stabilizing
– Risk appetite returning across assets, not just crypto
– Continued accumulation by long-term holders
– A narrative shift from capital preservation to growth
Until at least a few of those show up, Bitcoin being “cheap” relative to gold doesn’t mean it’s about to rip.
One Last Reality Check
People love anchoring to past cycles. It’s comforting. It’s also lazy.
Bitcoin is bigger now. Gold has new buyers. Central banks didn’t care about Bitcoin in 2015. They do care about gold in 2026.
That doesn’t invalidate relative valuation signals. It just means the payoff profile changes. The question isn’t whether Bitcoin does another 100x. It’s whether it regains relative strength.
That’s a lower bar. And a more realistic one.
Where I Land
I don’t read this signal as “buy now or miss everything.”
I read it as compression.
Expectations are crushed. Relative positioning is skewed. Patient money is quietly stepping in.
That’s usually where long-term asymmetry starts forming.
Not fast.
Not clean.
But real.
If you’re trading short timeframes, this setup doesn’t owe you anything. If you’re thinking in years, not weeks, this is the kind of moment you log and revisit later—when everyone else swears it was obvious.
It never is at the time.
Disclaimer
This article is for informational and educational purposes only and does not constitute financial, investment, trading, or legal advice. Cryptocurrencies, memecoins, and prediction-market positions are highly speculative and involve significant risk, including the potential loss of all capital.
The analysis presented reflects the author’s opinion at the time of writing and is based on publicly available information, on-chain data, and market observations, which may change without notice. No representation or warranty is made regarding accuracy, completeness, or future performance.
Readers are solely responsible for their investment decisions and should conduct their own independent research and consult a qualified financial professional before engaging in any trading or betting activity. The author and publisher hold no responsibility for any financial losses incurred.