Gold, silver outrun bitcoin as 2025's go-to protectors of paper money

This year, investors decisively chose precious metals such as gold to hedge against the potential erosion of paper money value, sidelining bitcoin BTC$87,842.60.

Gold has risen almost 70% since Jan. 1 and silver about 150%, far outpacing the largest cryptocurrency, which has fallen about 6%.

Analysts attributed the rally to the so-called “debasement trade.” That’s an investment strategy that involves buying perceived store-of-value assets and waiting for the fiat currency to devalue, or debase. The depreciation, the result of ultra-easy monetary policies and fiscal deficit, leads to a loss of purchasing power and drives up the price of the asset.

Early this year, BTC bulls made bold predictions, citing the debasement trade as a key catalyst driving their year-end forecasts. Bitcoin’s rally, however, abruptly ran out of steam above $126,000 in early October. Since then, it has pulled back to below $90,000.

Record rally in gold

Gold’s rally has been particularly notable from the perspective of technical analysis, according to The Kobeissi Letter.

The metal has remained above its 200-day simple moving average, a widely followed long-term trend indicator that smooths price action over roughly nine months, for around 550 consecutive trading days. This marks the second-longest streak on record, trailing only the approximately 750-session stretch that followed the 2008 financial crisis.

Still, the bitcoin bulls aren’t phased. Crypto analysts expect the cryptocurrency to catch up with gold next year, living up to its tendency to rally with a lag.

“Gold has been leading BTC by roughly 26 weeks, and its consolidation last summer matches Bitcoin’s pause today,” Lewis Harland, a portfolio manager at Re7 Capital, told CoinDesk. “The metal’s renewed strength reflects a market increasingly pricing in further currency debasement and fiscal strain into 2026, a backdrop that has consistently supported both assets, with Bitcoin historically responding with greater torque.”

The predictions market seems aligned with that view. As of writing, traders on Polymarket assigned a 40% probability of BTC being the best-performing asset next year, with gold at 33% and equities at 25%.