A sharp drop in Bitcoin prices has reignited an old debate: will the collapse of crypto trigger a rise in the price of gold? The comparison between the two “stores of value” has only become more pronounced over the years. However, gold’s rise in 2025 tells a different story.
Bitcoin prices have fallen nearly 25% this month, falling to a low near $80,500 last Friday. While the crypto token bounced back to $86,000. According to market tracker CoinGecko, approximately $1.2 trillion was wiped from the market value of all cryptocurrencies over the past six weeks, as of November 22.
What Triggered the Bitcoin Selloff?
According to a Bloomberg report, this latest crisis is mainly driven by spot sales, including redemptions of large exchange-traded funds, long-dormant portfolios offloading their holdings and dwindling demand from momentum traders.
Kunal Shah, Head of Commodities Research at Nirmal Bang, said that Bitcoin is a mirror and reflection of the global liquidity scenario. Bitcoin’s collapse coincides with Japanese 10- and 30-year bond yields hitting 20-year highs. “Typically, when the fixed income market witnesses such turbulence, there is a flight of capital from risk to safety. And that is what happens. And that is the main reason why Bitcoin collapsed the way it collapsed,” Shah explained, highlighting another reason behind the crypto market sell-off.
Can the collapse of Bitcoin be a gain for bullion?
At the same time, gold held firm, dampening Bitcoin’s appeal relative to bullion.
Rather, the rise in the gold price this year has been driven by macroeconomic forces – expectations of rate cuts, a weaker dollar, strong ETF inflows and central bank purchases. However, given that much of this strength is already reflected in prices, the likelihood of a fall in bitcoin leading to a bullish scenario for gold seems very unlikely to most analysts.
They said gold prices had climbed and pushed aside most of the positive fundamentals, which is why it should have been trading at $4,000.
“We believe that gold is likely to consolidate further and the upside potential will be very limited in the near term. The fundamentals of gold are not bullish at all. It has been moving well ahead of its fundamentals, and it is likely that it will consolidate and correct or see more profit-taking in the future,” Shah warned.
In the early morning hours of Monday, MCX gold futures collapsed by almost 1% due to the lack of immediate triggers. As expectations for Federal Reserve rate cuts fade and the U.S. dollar regains strength, gold bulls have taken a back seat after a nearly 50% rally in 2025 alone.
Looking ahead, the outlook for gold remains cautiously positive, with further upside dependent on further developments, said Ross Maxwell, head of global strategy at VT Markets.
“Further monetary easing, a further geopolitical shock or significantly lower real yields would all factor into future gold prices. At the same time, risks such as a firmer dollar, higher real yields or a pullback in central bank purchases could lock in gains or make gold sensitive and lead to corrections,” Maxwell added.
Main gold price levels
Prathamesh Mallya, DVP Research – Non Agri Commodities and Currencies at Angel One, says gold has room to rise to $4,500 to ₹1,36,000 in the next 12 months. At the bottom it can test $3,500 or ₹1,11,000 levels. “Even though hopes for a Fed rate cut are low, other factors such as central bank accumulation, safe-haven flows and the geopolitical situation could keep the doors open for a structural rise in gold.”
Similarly, Maxwell advised holding gold as a diversification tool and not as a hedge against short-term gains. A modest allocation between 5% and 10% is optimal, with opportunities to add drawdowns if real yields fall and demand for safe havens increases, he said.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or brokerage firms, and not of Mint. We advise investors to consult certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
