Gold has soared nearly 60% year-to-date, leaving bitcoin’s modest 13% gain in the shadow of its impressive rally. Despite ongoing optimism around a crypto bull market, gold’s performance continues to outpace bitcoin, reflecting distinct dynamics in these asset classes.
Market analysts emphasize that gold’s sharp rise does not suggest overvaluation. On Kalshi, a platform for trading event contracts, sentiment strongly favors gold as the better-performing asset for 2025, signaling confidence that the precious metal will continue its upward momentum relative to bitcoin.
However, data from Hyperliquid reveals a different story among cryptocurrency traders. Currently, only about 34% of positions in crypto markets are long, with a slim 35% profitability rate. The majority of traders are caught in losing shorts amid erratic price swings, exacerbated by the high leverage prevalent in crypto trading.
This volatile environment has led to significant financial strain. The average daily profit and loss (PnL) for users has dropped below $50,000, indicating sustained losses for many market participants. The recent collapse of well-known trader Machi Big Brother’s portfolio — which plunged from $43 million in gains to over $13 million in losses — highlights the dangers of aggressive leverage on bitcoin rebound bets.
Such patterns suggest that excessive leverage combined with overly optimistic market assumptions has transformed crypto trading into a minefield of poorly timed decisions rather than genuine demand based on macroeconomic fundamentals.
Supporting this view, Glassnode’s latest report documents a major deleveraging event in bitcoin’s history, with $19 billion in leverage wiped out. This reset phase has seen funding rates drop to levels last observed during the 2022 FTX collapse, negative inflows into bitcoin ETFs, and long-term holders distributing coins as prices strengthen. Without fresh demand, Glassnode cautions that bitcoin could experience further declines below the key $108,000 level.
In stark contrast, gold’s rise is underpinned by solid conviction. Factors like geopolitical tensions, easing inflationary pressures, and anticipation of U.S. interest rate cuts have bolstered gold’s role as a reliable safe-haven asset amid global uncertainties. Unlike the speculative crypto market, which heavily relies on ETF flows and derivatives leverage, gold’s advances are grounded in traditional macroeconomic drivers.
Looking at current market movements, bitcoin is trading near $108,287, having retreated amid renewed risk aversion, profit-taking, and ongoing macroeconomic uncertainty. Ether is similarly affected, falling to around $3,891, as speculative appetite diminishes across the crypto sector. Meanwhile, gold continues to climb as investors seek refuge from geopolitical risks.
Asian equity markets reflect this cautious stance, with the Nikkei 225 down 0.3% amid concerns over escalating geopolitical tensions.
Additional crypto developments include reports that the Trump family has already secured over $1 billion in cryptocurrency profits, according to Eric Trump via Decrypt. Furthermore, SEC Commissioner Hester Peirce has highlighted a growing emphasis on financial privacy and tokenization, while BNY Mellon remains focused on building stablecoin infrastructure despite maintaining a flexible approach to stablecoin adoption.
Overall, the current data points to a divergence between trader expectations and market realities, with gold strengthening its position and bitcoin facing headwinds amid leveraged trading and waning speculative support.
