This year, investors decisively chose precious metals such as gold to protect against the possible erosion of the value of paper money, leaving out bitcoin. .
Gold is up almost 70% since January 1 and silver about 150%, far outperforming the largest cryptocurrency, which is down about 6%.
Analysts attributed the rally to so-called “downgrade trading.” This is an investment strategy that involves purchasing assets perceived as a store of value and waiting for the fiat currency to devalue or degrade. Depreciation, the result of ultra-loose monetary policies and fiscal deficits, leads to a loss of purchasing power and raises the price of the asset.
Earlier this year, BTC bulls made bold predictions, citing downgrade trading as a key catalyst driving their year-end forecasts. The Bitcoin rally, however, abruptly lost steam above $126,000 in early October. Since then, it has retreated to below $90,000.
Record gold rally
Gold’s rally has been particularly notable from a technical analysis perspective, according to The Kobeissi Letter.
The metal has remained above its 200-day simple moving average, a widely followed long-term trend indicator that smoothes price action for about nine months, for about 550 consecutive trading days. This is the second-longest streak on record, surpassed only by the period of approximately 750 sessions that followed the 2008 financial crisis.
Still, bitcoin bulls have not stopped advancing. Crypto analysts expect the cryptocurrency to catch up with gold next year, matching its trend of recovering with a lag.
“Gold has been leading BTC for about 26 weeks, and its consolidation last summer coincides with Bitcoin’s pause today,” Lewis Harland, portfolio manager at Re7 Capital, told CoinDesk. “The metal’s renewed strength reflects a market that increasingly prices currency devaluation and fiscal stress through 2026, a backdrop that has consistently supported both assets, with Bitcoin historically responding with increased torque.”
The prediction market seems aligned with that vision. At the time of writing, Polymarket traders assigned a 40% chance of BTC being the best-performing asset next year, with gold at 33% and stocks at 25%.
