The Declining Value of Bitcoin

Schiff highlighted that the current exchange rate for Bitcoin now enables investors to acquire only 27.7 ounces of gold, compared to a peak of 36.3 ounces in 2021—marking a significant decrease of 24%. "In terms of gold, the price of Bitcoin has fallen by 24%. So Bitcoin has been in a stealth bear market for the past three and a half years," Schiff pointed out.

Bitcoin vs. Gold: An Analytical Perspective

However, this perspective doesn’t tell the whole story. Some analysts quickly countered Schiff’s narrative, accusing him of selectively choosing a timeframe that fits his bearish outlook. In fact, when observing the broader context of Bitcoin’s performance over the last decade, it has outstripped gold by an astonishing 12,000%. Moreover, during the last two years, Bitcoin has surged by 200% when compared to gold.

Nonetheless, the figures for 2025 reveal a stark contrast: Bitcoin's value dropped from 41 ounces to 28 ounces per BTC in relation to gold. This illustrates that, at least in the first quarter of 2025, gold has functioned as a more reliable store of value, particularly notable as it reached an impressive peak of $3,000 per ounce.

Institutional Interest Shifts to Gold

The shifting interest among institutional investors is further demonstrated by recent data showing that the market capitalization of Gold ETFs has overtaken that of U.S. Spot Bitcoin ETFs. Bloomberg analyst Eric Balchunas attributes gold’s resurgence—a significant 12% increase in 2025—to this shift in investor preference.

"The Empire strikes back: Gold ETFs have reclaimed the asset crown over Bitcoin ETFs, thanks to a 12% gain this year," Balchunas stated.

Future Projections for Bitcoin ETFs

Despite the setbacks for Bitcoin, Balchunas maintains optimism for Bitcoin ETFs in the long run. He posits that these financial products could soon outpace gold ETFs by threefold. "Despite the legit win for gold, I still think BTC ETFs will grow to triple that of gold ETFs. Yet, like I’ve said repeatedly, it’s not going to be a smooth path—more like two steps forward, one step back," he asserts.

A New Era for Digital Assets

It’s worth noting that the correlation between Bitcoin and gold has shifted significantly since early February 2025. The BTC Pearson correlation indicator implies that Bitcoin has begun to decouple from its physical counterpart, reflecting complex market dynamics influenced by external factors, including U.S. tariff wars and overall equity market fluctuations.

In summary, while Bitcoin may currently be underperforming relative to gold, its long-term viability, especially within the context of potential ETF growth, leaves room for renewed optimism among investors. As the financial landscape evolves, both digital gold and its physical counterpart remain pivotal to investors looking to navigate the uncertain waters of today’s economy.