This week's news: Why gold is shining while Bitcoin lags behind

The most relevant news in the asset markets this week reflects a notable contrast: while precious metals are experiencing a moment of historical splendor, bitcoin remains stuck on the margins of the market. This divergence has reignited the debate among experts about whether the institutional BTC adoption narrative has truly come to an end or if we are simply witnessing a natural pause in the price cycle.

Precious metals rally defies expectations

Precious metals markets experienced an explosive movement during the last few sessions, with gold reaching a new record at $4,930 per ounce, representing an increase of 1.7% in just one day. Silver was not far behind, climbing 3.7% to $96 per ounce. These movements reflect a growing appetite for safe-haven assets, traditionally associated with periods of uncertainty in the markets.

Bitcoin, in contrast, painted a very different picture. The top crypto asset was pressured lower, falling to $83.57K, with a loss of 6.38% over the past 24 hours. This drop puts bitcoin roughly 34% below its all-time high of $126.08K recorded earlier this year, deepening the debate over its current performance.

The Enigma of Underperformance: End of Narrative or Natural Correction?

The news has generated conflicting interpretations among analysts in the sector. Jim Bianco, principal at Bianco Research, posed a provocative question: has bitcoin’s institutional adoption narrative really come to an end? “Adoption announcements are no longer making the impact they used to,” Bianco said in a recent post. “The market needs a new driving theme, and for now it’s not clear what that might be.”

His outlook contrasts with that of Eric Balchunas, senior ETF analyst at Bloomberg, who offers a different angle. Balchunas recalled that bitcoin has experienced extraordinary growth in the long term. From the bottom of the crypto winter of 2022, when it reached less than $16,000, the asset soared to its recent highs, representing an approximate advance of 300% in about 20 months.

“Do they really expect annual returns of 200% without any pause?” asked Balchunas. His argument suggests that the current consolidation could be just that: a healthy pause after an extraordinary move.

The factor of early investors executing exit strategies

A deeper analysis of the price movements reveals another dynamic at play: the “silent profit-taking trade” executed by investors who acquired bitcoin years ago. Balchunas illustrated this phenomenon by citing the case of an investor who sold more than $9 billion worth of BTC recently, after holding his position for more than a decade. These types of movements, although individual, represent a constant flow of liquidity leaving the market.

When multiple long-term holders execute these exits simultaneously, the cumulative effect pushes the price downwards, especially in a context where speculative demand has weakened.

Performance comparison: The broader context since the 2024 election victory

This is where the narrative becomes even more interesting. Bianco analyzed the movements of various assets from shortly after the November 2024 presidential election victory until now, revealing a striking pattern:

• Bitcoin: -2.6%
• Silver: +205%
• Gold: +83%
• Nasdaq: +24%
• S&P 500: +17.6%

Not only did Bitcoin lag behind precious metals, but it turned out to be virtually the only asset in negative territory during this period. “While we wait for that new theme to drive the market, virtually everything else is moving fast, while bitcoin remains paralyzed,” Bianco observed.

Balchunas, however, added an additional perspective: just 14 months ago, in November 2024, bitcoin had gained 122% in yearly terms, significantly outperforming gold. “Metals are just trying to catch up,” he argued, suggesting that the current rally could be part of a long-term correction rather than a fundamental reversal.

The underlying news: A shift to defensive assets

The real turning point seems to lie in a broader shift in market psychology towards assets considered defensive. The decline of bitcoin and the CoinDesk 20 index occurred in parallel with a notable shift in risk aversion, driving capital from speculative crypto assets to tangible commodities and large-cap stocks.

Crypto derivatives markets also sent signals of caution, with a notable contraction in open interest and an increase in demand for protective options and short positions. These moves point to investors who are defensively positioned, anticipating potential additional volatility.

The news, in essence, reflects a temporary transition in investor preferences, where risk appetite has temporarily weakened, favoring traditional safe-havens such as gold and assets correlated with macroeconomic stability.