SKN | Gold and Silver Leave Bitcoin Behind as 2025’s Preferred Hedge Against Currency Debasement

In 2025, investors searching for protection against the erosion of paper money have made a clear choice: precious metals over bitcoin. While digital assets were once expected to dominate the so-called debasement trade, capital has instead flowed aggressively into gold and silver, leaving bitcoin lagging despite its long-standing reputation as “digital gold.”

Since the start of the year, gold has surged nearly 70% and silver has climbed about 150%, while bitcoin (BTC) is down roughly 6% year-to-date, trading near $88,000 after peaking above $126,000 in early October. The divergence marks one of the sharpest performance gaps between crypto and metals since bitcoin entered the mainstream investment conversation.

The debasement trade favors metals in 2025

The rally has been driven by the debasement trade — an investment strategy centered on assets perceived to preserve value as fiat currencies lose purchasing power. Concerns around persistent fiscal deficits, elevated government debt, and expectations of looser monetary policy in coming years have revived demand for hard assets.

In this environment, gold and silver have benefited from their historical status as inflation hedges and from deep institutional acceptance. Central banks, sovereign funds and conservative asset allocators have continued to add exposure to metals, reinforcing momentum already supported by retail and macro-focused investors.

Bitcoin, by contrast, has struggled to capture the same flows. After rallying strongly through the first three quarters of the year, BTC’s advance stalled in October and gave way to a prolonged correction. Since then, price action has remained choppy, undermining confidence among investors who expected bitcoin to outperform during a period of heightened debasement concerns.

Gold’s technical strength stands out

From a technical perspective, gold’s rally has been exceptional. According to market analysts at The Kobeissi Letter, the metal has remained above its 200-day simple moving average for roughly 550 consecutive trading days — the second-longest streak on record.

The 200-day moving average is widely viewed as a defining indicator of long-term trend health. Sustained trading above that level signals strong institutional support and trend persistence. The only longer streak occurred after the 2008 financial crisis, when gold spent roughly 750 sessions above its long-term average as investors sought safety from systemic risk.

Silver, typically more volatile than gold, has amplified the move. Its dual role as both a monetary metal and an industrial input has drawn speculative and structural demand, producing price swings that, at times, resemble crypto-style volatility.

Bitcoin’s lag may be cyclical, not structural

Despite underperforming this year, bitcoin proponents argue the current divergence may be temporary. Historically, BTC has often lagged gold during early phases of macro-driven rallies before catching up — and then outperforming — later in the cycle.

“Gold has been leading bitcoin by roughly six months,” said Lewis Harland, portfolio manager at Re7 Capital. “The metal’s renewed strength reflects markets 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.”

That view is echoed in prediction markets. On Polymarket, traders currently assign a roughly 40% probability that bitcoin will be the best-performing major asset in 2026, compared with 33% for gold and 25% for equities.

Psychology and positioning matter

Investor psychology has also played a role. After repeated drawdowns and heightened volatility, some allocators appear to favor the perceived stability and familiarity of metals over crypto’s sharper swings. Meanwhile, bitcoin’s increasingly institutionalized ownership base — via ETFs and corporate treasuries — may be dampening the explosive upside moves seen in earlier cycles.

Looking ahead

The 2025 performance gap underscores a shifting dynamic in the debasement trade. Gold and silver have reclaimed center stage as immediate hedges against currency erosion, while bitcoin has yet to reassert that narrative convincingly.

Still, if historical patterns hold and macro pressures intensify, bitcoin may yet play catch-up. Whether it does will depend on renewed risk appetite, clearer monetary signals, and the market’s willingness to once again view crypto as a core store-of-value asset — not just a high-beta alternative.