Bitcoin Set for 'Strong but Not Spectacular' Returns as Analysts Dismiss Gold Competition Narrative

Analysts Reject Competition Narrative Between Bitcoin and Gold

Bitcoin doesn't need to wait for a pullback in gold and silver to continue its upward trajectory, according to prominent cryptocurrency analysts, challenging a popular narrative among market observers.

"Surprisingly unpopular opinion," Glassnode lead analyst James Check said in an X post on Friday, adding that Bitcoiners who think otherwise "don't understand any of these assets" ^[1].

Macroeconomist Lyn Alden echoed this sentiment in a podcast published to YouTube on Saturday, stating that while "a lot of people phrase it as competition," she is "not in that camp" ^[1]. Alden explained that the Bitcoin-to-gold ratio has performed strongly recently because Bitcoin spent the past year in a "stagnant stage," while gold experienced one of its "more tremendous years" ^[1].

"Both of them have long-term structural stories behind them," Alden said ^[1].

Precious Metals Hit Records While Bitcoin Pulls Back

Gold and silver both reached all-time highs on Friday, with silver passing $77 and gold reaching $4,533, according to Trading Economics data ^[1]. Peter Grant, vice president and senior metals strategist at Zaner Metals, told CNBC on Friday that "expectations for further Fed easing in 2026, a weak dollar and heightened geopolitical tensions are driving volatility in thin markets" ^[1].

Meanwhile, Bitcoin has fallen nearly 30% since hitting its all-time high of $109,000 following Donald Trump's inauguration as US president, trading at $87,650 at the time of publication ^[1]. The cryptocurrency is down 3.81% over the past 30 days ^[2].

The correlation between gold and Bitcoin, which moved fairly closely together between November 2022 and November 2024, has weakened this year. Gold is up about 60%, while Bitcoin is down 7.2% ^[1].

Institutional Buying Cushions Bitcoin's Decline

Bitwise chief investment officer Matt Hougan said on CNBC on Friday that Bitcoin may post steady returns over the next decade, though exceptionally large year-on-year gains are unlikely ^[2].

"I think we're in a 10-year grind upward of strong returns. It's not spectacular returns, [but] strong returns, lower volatility, some up and down," Hougan said ^[2].

Hougan attributed Bitcoin's relatively modest 30% decline—compared to the 60% drops seen in past cycles—to "persistent, slow-moving institutional buying" ^[2]. He explained that the "fast-moving retail crowd" is one reason behind Bitcoin's year-end decline, as retail investors rotated out "in anticipation of that four-year cycle" ^[2].

Market participants remain divided on whether Bitcoin's four-year cycle has ended, with the timing of the October highs mirroring past cycle peaks, suggesting a possible down year in 2026 ^[2].

Mixed Outlook for 2026

Despite current weakness, several industry executives anticipate a reversal in Bitcoin's downtrend. Hougan is sticking with his forecast that 2026 will be a positive year for Bitcoin, an outlook he first shared in July ahead of Bitcoin's run to a new all-time high of $125,100 in October ^[2]. "I think next year will be up," Hougan said ^[2].

Jan3 founder Samson Mow said that Bitcoin may be about to embark on a "decade-long bull run" ^[1], while MN Trading Capital founder Michael van de Poppe stated that "the higher Gold goes, the higher BTC likely will follow through" ^[1].

However, some analysts remain cautious. Veteran trader Peter Brandt recently predicted that Bitcoin could fall as low as $60,000 by the third quarter of 2026 ^[2].

Regarding potential catalysts, Hougan said the Trump administration is unlikely to provide much more upside for Bitcoin's price. "There's not much more they can marginally do for Bitcoin," Hougan said, pointing to clearer regulatory positioning of the asset ^[2].

Market sentiment reflects the current divergence between asset classes. On Saturday, the Gold Fear & Greed Index posted a "Greed" score of 79, while the Crypto Fear & Greed Index registered "Extreme Fear" at 24 ^[1].