Bitcoin (BTC) has faced significant challenges in 2025, with its price declining relative to gold. According to well-known Bitcoin critic Peter Schiff, the world’s largest cryptocurrency has entered a “stealth bear market” when compared to gold. Schiff’s perspective highlights a troubling trend where Bitcoin has lost significant value relative to gold since its peak in 2021.

Bitcoin’s Decline Relative to Gold

In 2021, one Bitcoin was worth approximately 36.3 ounces of gold. Fast forward to 2025, and that figure has dropped to just 27.7 ounces, signaling a 24% decline in Bitcoin’s value compared to gold. Schiff points out that this drop over the past three and a half years reflects a broader trend where Bitcoin has failed to maintain its previous upward trajectory against the precious metal.

Bitcoin’s performance relative to gold has raised a wider debate, with many wondering whether this signals a longer-term decline for the cryptocurrency. While Schiff’s assessment seems grim, other analysts argue that his focus on a short-term timeframe ignores Bitcoin’s strong historical performance, particularly over the last decade.

Bitcoin’s Long-Term Performance vs Gold

Over the past 10 years, Bitcoin has far outpaced gold in terms of returns. The cryptocurrency has surged over 12,000%, while gold has seen much more modest gains. Over the last two years, Bitcoin has increased by 200% against gold. However, the year 2025 has marked a shift in favor of gold.

Bitcoin’s price has dropped 32% relative to gold in 2025, slipping from 41 to 28 on the BTC/gold chart. This steep decline follows a period in which Bitcoin experienced significant volatility and erased the gains made during the so-called “Trump pump” period. In contrast, gold reached a new all-time high of $3,000 in early 2025, showcasing its strength as a store of value during a time of economic uncertainty.

Gold ETF Dominance and Institutional Interest

One key factor in gold’s recent performance is the growing institutional interest in gold-backed exchange-traded funds (ETFs). According to Bloomberg analyst Eric Balchunas, Gold ETFs have seen a substantial rise in 2025, particularly in comparison to Bitcoin ETFs. In fact, the market capitalization of gold ETFs has surpassed that of U.S. Spot Bitcoin ETFs.

Balchunas attributes this shift in favor of gold to a 12% spike in gold’s price this year, which has contributed to the resurgence of gold-backed ETFs. However, Balchunas remains bullish on Bitcoin ETFs in the long term. He believes that despite gold’s current outperformance, Bitcoin ETFs are poised to surpass gold ETFs, potentially reaching three times the size of the gold ETF market in the coming years.

Market Dynamics: Bitcoin and Gold’s Divergence

In early 2025, Bitcoin began to decouple from gold, with the cryptocurrency showing a stronger correlation to U.S. equities and external factors like Trump’s tariff wars. This decoupling has contributed to Bitcoin’s underperformance relative to gold, especially as institutional investors flock to gold as a safer asset in times of uncertainty.

The Pearson correlation indicator, which measures the relationship between Bitcoin and gold, revealed this divergence as early as February 2025. While Bitcoin’s price has been swayed by broader market dynamics and external events, gold’s stability and safe-haven status have made it a more attractive investment during times of market turbulence.

Bitcoin’s Potential for Future Growth

Despite its recent struggles relative to gold, Bitcoin is not without its supporters. Analysts like Peter Brandt have echoed Balchunas’ optimistic view, projecting that Bitcoin will ultimately outperform gold by over 120%. This outlook is based on bullish patterns observed in the BTC/gold chart, indicating that Bitcoin’s long-term potential remains intact.

While 2025 has been a challenging year for Bitcoin in comparison to gold, the long-term outlook for the cryptocurrency remains positive. Analysts believe that the market will stabilize, and Bitcoin ETFs will play a significant role in Bitcoin’s future growth, eventually overcoming the challenges posed by gold in the short term.

Conclusion

Peter Schiff’s claim that Bitcoin is in a “stealth bear market” relative to gold highlights the challenges facing the cryptocurrency in 2025. While Bitcoin has lost significant value compared to gold, analysts remain optimistic about its long-term potential. With the rise of Bitcoin ETFs and continued institutional interest, Bitcoin may eventually recover and surpass gold once again. However, in the short term, it’s clear that gold has proven to be the more stable store of value, while Bitcoin faces a volatile market.