Why Bitcoin's returns are more complex than they seem, and a major signal that could change everything
If you invested $10,000 in Bitcoin back in November 2022, today you’d be sitting on roughly $45,000, even after the recent pullback. That’s a stellar 350% gain in just under three years. But when you measure Bitcoin’s performance against gold — the traditional store of value — the story is quite different. Instead of a 350% increase, Bitcoin is only up about 120% versus gold. This nuance matters because many investors expect Bitcoin to dramatically outperform gold as it did in its last bull run. So why the disconnect? And could that be about to shift?
In this article, we’ll explore the deeper relationship between Bitcoin and gold, why Bitcoin’s outperformance has been muted against gold, and reveal a key market signal that hints at a major rotation favoring Bitcoin. Whether you’re an experienced crypto investor or just curious about Bitcoin’s evolving role, you’ll walk away with clearer insight into how macroeconomic forces and investor behavior shape Bitcoin’s true potential.
Understanding Bitcoin vs Gold: The Digital and Geological Stores of Value
Bitcoin is often called “digital gold” — a modern, algorithmically scarce asset designed to offer protection against currency debasement. Currency debasement happens when governments increase debt and expand the money supply, eroding the purchasing power of fiat currencies. Investors then gravitate toward scarce assets that cannot be printed.
Gold has been that traditional safe haven for over 5,000 years. It grows supply by only about 1.7% annually, is physically durable, and recognized worldwide. Central banks have been buying gold aggressively to diversify their reserves amid growing debt concerns.
Bitcoin, on the other hand, is only 16 years old but shares several key features with gold:
- Fixed supply capped at 21 million coins
- Supply inflation rate currently at 0.8%, halving every four years
- Digital durability secured by decentralized blockchain technology
- Increasingly adopted by institutions and sovereign entities
Bitcoin’s scarcity is algorithmic, versus gold’s geological scarcity. Both assets reflect market concerns about trust in government-issued money.
Despite 450% Gains in USD, Bitcoin’s Outperformance Against Gold Has Stalled
From November 2022 to mid-2025, Bitcoin increased over 450% in US dollar terms. Sounds like a huge win. But measured against gold, it’s roughly only a 120% gain. In fact, Bitcoin-to-gold valuation has fallen to levels seen in early 2021. This means:
- Investors who chose Bitcoin over gold for higher returns have seen little real outperformance in the last 5 years when accounting for gold’s strength.
- The much-anticipated 1200% outperformance (similar to the 2017 bull run) did not materialize.
Why? Because gold surged roughly 150% since 2023 as US federal debt exploded by over $7 trillion. Gold is already pricing in serious concerns about the US dollar’s long-term stability.
Data callout: The US government’s interest payments on its $38 trillion debt now consume approximately 3% of GDP, a figure expected to more than double by 2050 — threatening fiscal sustainability and fueling safe-haven demand.
A Key Market Signal: Silver Outperformance Hints at Rotation Toward Bitcoin
When gold rallies strongly, some investors rotate gains into riskier assets still linked to the debasement theme, like silver and Bitcoin. Tracking gold relative to silver performance reveals investor rotation behavior:
- When silver outperforms gold, capital is moving further out the risk curve.
- In the past decade, big silver outperformance spikes happened only five times.
- Each spike preceded major Bitcoin price surges over the next 6 to 12 months.
- Plotting the Bitcoin-to-gold ratio in those periods confirms that these silver rallies are a strong leading indicator of Bitcoin outperforming gold.
Right now, in just the past 10 days, silver has outpaced gold by over 10%, signaling that capital may again be shifting toward Bitcoin as a risk-on store of value.
Onchain Evidence: Large Bitcoin Investors Are Accumulating
Supporting the silver-gold rotation signal, onchain data shows major Bitcoin withdrawals from exchanges recently:
- Over 375,000 Bitcoins were pulled off exchanges in a single correction phase — nearly 2% of Bitcoin’s total supply.
- Such large-scale withdrawals typically indicate buying with the intention to hold long-term, not sell.
- Historical precedents include similar moves in October 2022, March 2020, and November 2017—each followed by strong bull runs.
- The November 2017 accumulation, for example, led to a 250% rally in one month.
This onchain buying suggests that smart money is positioning for Bitcoin’s next upward leg, potentially as capital rotates out of gold.
Risks and What Could Go Wrong
- Bitcoin remains volatile: Short-term crashes like October 2022’s 30% dip remain possible.
- Gold’s continued strength: Gold could rally further if market fears escalate, pulling capital away from Bitcoin.
- Regulatory risks: Changes in crypto regulation can negatively impact Bitcoin’s adoption and price.
- Macro uncertainty: Unexpected macro shocks or monetary policy shifts could alter currency debasement expectations.
Investors must weigh these risks and monitor key metrics before committing fresh capital.
Answer Box: Why is Bitcoin’s performance different when measured against gold?
Bitcoin’s value in US dollars shows large gains, but gold has also surged amid increasing debt concerns. When comparing Bitcoin to gold, Bitcoin's performance is less impressive because gold is rising concurrently as a safe haven, diluting Bitcoin’s relative return despite its high nominal gains in USD.
Actionable Summary
- Bitcoin gained roughly 350% in USD since late 2022, but only about 120% vs gold.
- Gold’s surge reflects concerns over soaring US debt and currency debasement.
- Silver’s recent 10% outperformance vs gold signals rotation toward higher-risk assets like Bitcoin.
- Large onchain Bitcoin withdrawals from exchanges confirm institutional accumulation.
- While promising, Bitcoin still faces volatility, regulatory, and macro risks.
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FAQ
Q1: Why compare Bitcoin to gold instead of just USD?
Gold is the traditional store of value and a hedge against currency debasement. Comparing Bitcoin to gold provides a clearer picture of its true performance against inflation-resistant assets.
Q2: What does silver outperforming gold mean for investors?
It often signals that capital is rotating to riskier assets. Historically, this has preceded strong Bitcoin rallies.
Q3: What does pulling Bitcoin off exchanges indicate?
Large withdrawals suggest long-term holding intentions by investors, which can be a bullish sign.
Q4: Can Bitcoin still drop sharply despite these signals?
Yes. Bitcoin's volatility means short-term corrections are always possible, even amid longer-term bullish setups.
Q5: How does government debt affect Bitcoin and gold prices?
Higher government debt can lead to currency debasement fears, boosting demand for scarce assets like gold and Bitcoin.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investing involves risk. Please conduct your own research and consult financial professionals before investing.
By Wolfy Wealth - Empowering crypto investors since 2016
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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
