How the gold rush ended in October 2025
After a significant rally that pushed gold prices above $4,300 per ounce, the metal reached a historic milestone driven by strong safe demand. By October 2025, the market began to experience revenue capture.
Gold prices fell by more than 2% on October 17, 2025, immediately after the milestone was reached. At the time of writing, Spot Gold is trading around $4,023 per ounce: an 8.1% decline from the all-time high of $4,378.69.
The main trigger for the drop was the escalation of US-China trade tensions after President Donald Trump said that maintaining full tariffs on China was unsustainable. In addition, a stronger US dollar and renewed investor interest in higher-yielding assets such as Bitcoin (BTC) contributed to the pullback.
do you know The term “digital gold” gained popularity as the scarcity and freedom of Bitcoin began to reflect gold’s role as a hedge against inflation.
History of Gold: Crashes and peaks
Gold’s history is marked by dramatic surges and steep declines, driven by inflation, interest rates and geopolitical events. From the early 1980s peak to the sharp correction after 2013 and its strong rally in the 2020s before the October 2025 crash, the gold market has witnessed many ups and downs.
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1980-1999 Drop: Following a rapid price surge driven by high inflation and geopolitical tensions, gold sank in January 1980 to around $850 per ounce. The rally ended in “Volcker Shock,” when Federal Reserve Chair Paul Volcker went aggressive. Between 1980 and 1982, the Fed pushed the federal funds rate above 20% to curb inflation, triggering a sharp recession. This led to a major sell-off, with gold prices falling more than 60% in 1982 and ushering in a long-term bear market. From around $850 per ounce in 1980, the price of gold declined to about $278 per ounce in 1999.
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2012-2018 Crash: After peaking in 2011, gold entered a prolonged decline as the global economy stabilized and equities were released, reducing gold’s appeal as an investment. In 2013, the US Federal Reserve began tapering its quantitative easing program, bolstering the US dollar and shifting capital to higher-yielding assets—further pressuring gold prices. The SPDR Gold Trust, a major gold exchange-traded fund (ETF), has seen more than 30% of its holdings retreat, signaling a crushing investor interest. Between 2014 and 2018, gold traded within a range of $1,200-$1,400 per ounce, down from around $1,680 in 2012.
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2020s: The 2020s restored gold’s status as a safe-haven asset in times of global uncertainty. When Covid-19 brought economies to a standstill, governments around the world rolled in more than $10 trillion in stimulus, fueling concerns about inflation. By 2022, US inflation will climb above 9%, strengthening gold’s position as a financial hedge. Central banks have also increased their purchases, adding approximately 1,000 metric tons of gold per year between 2022 and 2024. Even as interest rates rise, gold prices move from around $1,785 in 2020 to more than $3,200 by early 2025.
The October 2025 gold crash, however, left investors looking for alternatives like Bitcoin (BTC), which remains relatively independent of government and central bank policies.
How money started flowing in Bitcoin
The digital gold narrative has strengthened in particular, with younger investors increasingly looking to Bitcoin as a modern hedge against inflation and currency devaluation. Many now see Bitcoin as more accessible and innovative than physical bullion, pushing its market capitalization from $134 billion in 2019 to above $2.4 trillion in the first half of 2025.
Spot Bitcoin ETFs and exchange-traded products (ETPs) Provide institutional-grade access, attracting billions of regulated flows. In early October 2025, the US Spot Bitcoin ETF recorded a record $3.55 billion in weekly inflows, led by BlackRock’s Ishares Bitcoin Trust (IBIT), which helped push BTC past $126,000. Meanwhile, gold ETFs have faced outflows of more than $2.8 billion in recent weeks, underscoring the contrast with Bitcoin’s momentum.
Gold flows and Bitcoin flows have historically shown an inverse relationship, with Bitcoin’s correlation with gold falling to -0.3 during periods of risk sentiment. Exchange balances fell to a six-year low of 2.83 million BTC, signaling reduced selling pressure.
$200,000 Bitcoin: A realistic target?
Bitcoin’s path to $200,000 appears to be supported by strong market and macroeconomic factors. April 2024 Stopping reduced block rewardstight supply amid growing demand. Many indicators continue to suggest steady growth for the cryptocurrency.
With global debt continuing to rise, Bitcoin’s appeal as a decentralized investment asset continues to grow. In the first half of 2025, global debt will reach nearly $338 trillion – about 235% of global GDP.
The institutional catalysts driving bitcoin adoption are gaining momentum. As of October 24, 2025, Strategy (MSTR) held 640,418 BTC, followed by Marathon Digital Holdings (MARA) and Celsius (CEP), which held 53,250 and 43,514 BTC, respectively.
A move by the US Federal Reserve to ease monetary policy could provide a further boost. The $200,000 level serves as a strong psychological benchmark, likely encouraging investors to move away from assets like gold, which has already seen $2.8 billion exit its ETFs.
do you know Gold has held its status as a store of value for more than 5,000 years, while Bitcoin has gained similar recognition in just over a decade.
How capital moves from gold to Bitcoin
Capital moving from gold to Bitcoin often defines major market cycles, highlighting how investor preferences evolve over time. The main cycles include:
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2013-2017: From 2013 to 2017, gold prices remained relatively flat between $1,200 and $1,400 per ounce following the peak of 2011, while Bitcoin advanced from $100 to $20,000. The rally has been fueled by retail investors looking for a decentralized alternative to fiat currency.
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2020-2021: Between 2020 and 2021, institutional adoption pushed Bitcoin to $69,000 while Pandemic-era stimulus and inflation fears pushed companies like MicroStrategy to favor BTC over gold. Historically, gold has attracted cautious investors in stable times, but in risk-on phases, Bitcoin tends to draw capital with its scarcity and potential growth.
Recent trends reinforce this change. Bitcoin ETFs recorded $3.55 billion in weekly inflows in October 2025, while gold ETFs saw $2.8 billion in inflows. These flows highlight a building shift towards digital assets as global uncertainty continues.
do you know Gold supply increases by about 1% per year, while Bitcoin supply growth stagnates every four years, creating a growing scarcity that underpins the long-term value narrative.
Bitcoin’s path blocks at $200,000
While crypto enthusiasts expect Bitcoin to reach $200,000, the path is not without obstacles. These include volatility, regulatory uncertainty, the possibility of gold returns and competition from other assets:
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Bitcoin volatility: Like all cryptocurrencies, bitcoin is highly volatile, experiencing sharp surges and corrections. Institutional buying can trigger price rallies, while large holders (“whales”) selling their bitcoin can lead to sudden declines.
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Regulatory uncertainties: In many parts of the world, Bitcoin regulation is still formative. Continued ambiguity around taxation and compliance may hinder institutional participation.
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Possible return of gold: As of October 2025, some investors who have seen significant returns have started pulling funds from gold miner ETFs. Meanwhile, Crypto ETFs saw record inflows of $5.95 billion globally in the third week of October 2025, according to Reuters. Strong demand for crypto assets helped push Bitcoin to an all-time high. However, as a safe-haven asset, gold can still make a comeback.
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Competition: Equities, with average annual returns of about 10%, compete with digital assets. Tokenized Treasury and Central Bank Digital Currencies (CBDCS) also show stable alternatives. These options can transfer funds from Bitcoin.
A generational shift in store-of-value assets
A transformative development is redefining how people view store assets. Younger investors shaped by the digital age are increasingly drawn to Bitcoin for its decentralized, borderless nature and potential for high returns.
Older generations, in contrast, continue to favor gold for its tangible form and proven stability. The growing digitization of finance is accelerating this shift, as blockchain technology replaces slow, paper-based systems with more transparent and efficient alternatives.
However, gold and bitcoin can coexist over time within a two-tier hedge model. Gold offers reliability through physical scarcity and historical track record, while Bitcoin provides growth through limited supply and digital flexibility. Together, they strike a balance between tradition and innovation, reflecting how investors are adapting to an increasingly complex financial world.
