A growing number of market watchers believe the long-standing dominance of gold as the go-to safe haven could soon be challenged by Bitcoin.
On-chain data from CryptoQuant, interpreted by analyst Joao Wedson, points to what he describes as a once-in-a-decade setup favoring the digital asset.
Wedson’s research suggests that the relationship between Bitcoin and gold has reached a critical inflection point. The BTC/Gold ratio – a measure tracking how the cryptocurrency performs relative to the precious metal – has fallen to levels typically seen at the bottom of major market cycles. Each time this happened in the past, Bitcoin went on to outperform gold by a wide margin.
The analyst’s proprietary oscillator, which visualizes relative strength between the two assets, is now flashing rare signals that have historically marked the end of Bitcoin’s weakness. “The data is shouting that gold is overbought compared to Bitcoin,” Wedson noted, hinting that capital could soon rotate from traditional hedges to digital ones.
Gold’s Grip Loosens as Bitcoin Recovers
Institutional sentiment appears to be quietly shifting. After several quarters of building exposure to gold amid global uncertainty, large investors are now reassessing their defensive positioning. Wedson argues that Bitcoin’s risk-reward profile is starting to look far more compelling – particularly as volatility stabilizes and liquidity returns to crypto markets.
“Gold has served its purpose, but Bitcoin offers asymmetric upside from here,” he said in his commentary. The BTC/Gold ratio, which has acted as a barometer of risk appetite for over a decade, tends to bottom just before Bitcoin’s strongest rallies. Past examples include the 2020 and 2015 cycles, both of which were followed by exponential gains for BTC.
Market Metrics Back the Case
The timing of this signal aligns with broader market data pointing to undervaluation. Research outlet Milk Road recently observed that Bitcoin’s current trading range sits two standard deviations below its long-term mean – territory that historically coincides with heavy accumulation rather than distribution.
According to their analysis, periods when Bitcoin fell this deeply below its fair value band often marked the start of prolonged bull markets. “Smart money doesn’t buy at the top; it accumulates during fear,” their note said, suggesting that the next upward cycle could extend into 2026.
Renewed Debate Over “Digital Gold”
The discussion has also reignited an old rivalry between traditional gold advocates and Bitcoin supporters. Veteran gold proponent Peter Schiff recently claimed that Bitcoin has failed to deliver on its promise as “digital gold.” His criticism was met with a swift rebuttal from Binance’s Changpeng Zhao, who countered that Bitcoin’s long-term performance far surpasses that of gold.
Despite recent market turbulence, Bitcoin continues to show relative strength. Data from TradingView places the cryptocurrency near $106,900 – up modestly on the day and nearly 60% higher than a year ago. Year-to-date, BTC still holds a gain of over 14%, even after steep corrections in the wider crypto sector.
Opportunity in Disguise
Market veterans often say that major bottoms are visible only in hindsight. But Wedson and other analysts suggest that this time, the clues are clear. With technical indicators aligning and sentiment near multi-month lows, Bitcoin may be setting the stage for its next leg higher.
“The market always tests conviction before rewarding it,” Wedson said. “The question isn’t whether Bitcoin will outperform gold again – it’s who will notice it early enough.”
If history rhymes, this could be one of those rare windows when patience pays more than panic.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Source: https://coindoo.com/bitcoin-vs-gold-is-a-major-power-shift-underway/