A sharp drawdown in Bitcoin prices has revived an old debate: Will crypto meltdown spark a gold price rally? The comparison between the two “stores of value” has only grown louder over the years. Yet 2025’s gold rally tells a different story.
Bitcoin prices have slumped nearly 25% this month, falling to a low near $80,500 last Friday. While the crypto token rebounded to $86,000. About $1.2 trillion has been wiped off the market value of all cryptocurrencies in the past six weeks as of November 22, according to market tracker CoinGecko.
What has sparked selloff in bitcoin?
This latest slump has been driven primarily by spot selling — including redemptions from large exchange-traded funds, long-dormant wallets offloading holdings, and fading demand from momentum traders, as per a Bloomberg report.
Kunal Shah, Head of Commodity Research at Nirmal Bang, said that Bitcoin is a mirror and a reflection of the global liquidity scenario. The collapse in Bitcoin coincides with the Japanese 10-year and 30-year bond yields making their 20-year highs. “Generally, when the fixed-income market witnesses such turbulence, there is a flight of capital from risk to safety. And that is what is happening. And that is the main reason why Bitcoin has collapsed the way it has collapsed,” explained Shah, highlighting another reason behind crypto market selloff.
Can bitcoin meltdown be bullion’s gain?
At the same time, gold has held its ground, thus fading Bitcoin’s appeal in comparison with the bullion.
This year’s gold price rally has been driven by macro forces — rate-cut expectations, a softer dollar, strong ETF inflows, and central-bank buying—rather. With much of that strength already reflected in prices, however, the likelihood of falling bitcoin resulting in a bullish scenario for gold looks very unlikely to most analysts.
They said that gold prices have run up and discounted most of the positive fundamentals, because of which it should have been trading at $4,000.
“We believe that gold is likely to consolidate further, and the upside is going to be very restricted in the near term. The fundamentals of gold are not bullish at all. It has run up way ahead of its fundamentals, and it is likely to consolidate and correct or witness some more profit-taking going forward,” warned Shah.
In Monday’s early morning trade, MCX gold futures crashed nearly 1% amid a lack of immediate triggers. With the rate cut expectations by the Federal Reserve dimming and the US dollar regaining strength, gold bulls have taken a backseat following a nearly 50% rally in 2025 alone.
Looking ahead, the outlook for gold remains cautiously positive, with further upside dependent on new developments, said Ross Maxwell, Global Strategy Lead at VT Markets.
“Deeper monetary easing, renewed geopolitical shock or significantly weaker real yields, would all factor into future pricing for gold. At the same time, risks like a firmer USD, higher real yields or a pull-back in central-bank buying could stall gains or make gold sensitive and lead to corrections,” Maxwell added.
Key gold price levels
Prathamesh Mallya, DVP Research – Non Agri Commodities and Currencies at Angel One, says gold has the scope to move to $4500 to ₹1,36,000 over the next 12 months. While on the lower side, it can test $3500 or ₹1,11,000 levels. “Although the FED rate cuts hopes dim, other factors like central bank accumulation, safe haven flows, and geopolitical situation might keep the doors open for a structural bull run in gold.”
Similarly, Maxwell advised keeping gold as a diversification tool and not a hedge for short-term gains. A modest allocation between 5 and 10% is optimal, with opportunities to add on dips if real yields fall and safe-haven demand rises, he said.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
