Gold and Silver Prices Soar, but Why Is Bitcoin Falling? [Why&Next]

Gold Surpasses $4,700, Silver Hits Record $93
Meanwhile, Bitcoin Drops to $90,000 Amid Recent Decline
"Decoupling Likely to Persist if Geopolitical Risks Continue"

Recently, a decoupling phenomenon between gold, silver, and Bitcoin has become increasingly evident. In the past, when gold prices rose, Bitcoin tended to follow suit, showing a correlated movement. However, last year, while gold and silver surged significantly, Bitcoin showed a sluggish trend, indicating signs of decoupling. Gold and silver, as representative safe-haven assets, have continued to rise in price amid geopolitical risks and macroeconomic uncertainty. In contrast, Bitcoin, due to factors such as volatility, has yet to be fully accepted as a safe-haven asset, which appears to be driving the decoupling trend. Experts predict that this decoupling will likely continue for the time being, especially as geopolitical risks remain prominent.

Last Year: Gold Up 64%, Silver Up 142% ... Bitcoin Down 6%

As of 9:00 a.m. on January 21, the international gold price (XAU/USD) stood at $4,778.65 per ounce. The gold price surpassed $4,700 for the first time ever the previous day. Meanwhile, the silver price (XAG/USD) was $94.8740 per ounce. Like gold, silver recently broke through the $94 mark, reaching an all-time high. In contrast, at the same time, Bitcoin was trading at $88,400, down 4.60% from 24 hours earlier. On January 19, Bitcoin was at $92,000, but fell below $90,000 the previous day, continuing its downward trend.

In the past, gold, silver, and Bitcoin moved in tandem because they were considered alternative assets to the dollar. Sim Subin, a researcher at Kiwoom Securities, explained, "The past simultaneous rise of gold and Bitcoin was driven more by demand for alternative assets to the dollar than by their status as safe-haven assets. The expansion of the U.S. fiscal deficit and the Federal Reserve's accommodative monetary policy heightened concerns about the value of fiat currencies, benefiting both assets." Yang Hyunkyung, a researcher at iM Securities, said, "In an environment where geopolitical and fiscal risks are on the rise, gold has become more favored because it carries no issuer risk. Bitcoin, too, has formed a 'digital gold' narrative since it also has no issuer risk and can serve as a means to evade sanctions."

However, since last year, a decoupling trend has begun to emerge. Last year, international gold and silver prices soared by 64% and 142%, respectively, while Bitcoin fell by 6%. In particular, compared to its peak in early October last year, Bitcoin dropped by more than 30%. After ending last year at around $88,000, Bitcoin showed a gradual recovery this year, rising to about $96,000. However, after President Donald Trump announced tariffs on Europe related to Greenland, Bitcoin fell back to around $92,000.

Differences in Credibility and Supply-Demand Structure Divide the Fate of Gold and Bitcoin

Researcher Sim stated, "From the perspective of financial market participants, there are structural differences in the level of trust in gold and Bitcoin, and this is the most crucial factor behind the recent decoupling between the two. As uncertainty surrounding additional Fed rate cuts increased, the decoupling between gold and Bitcoin began. Although the launch of spot Bitcoin ETFs has established Bitcoin as a regulated investment asset, its higher volatility and shorter history compared to gold remain significant burdens. In particular, during price declines, the potential for Digital Asset Treasury (DAT) companies to sell is perceived as a source of supply instability." He added, "Furthermore, since previous Bitcoin bull cycles have typically ended within about 18 months after halving, concerns about the end of the current upward phase have also grown."

Hong Jinhyun, a researcher at Samsung Securities, commented, "The recent decoupling is due to increasing demand for gold and silver, while Bitcoin has undergone a correction. The reasons for the increase in gold demand and price include hedging against dollar and U.S. asset system risks, banks' rebalancing of reserve assets, and geopolitical risk premiums. Bitcoin's underperformance stems from sharply deteriorating sentiment since October last year, which has spread a correction mood. Depending on the crypto cycle, a range-bound trend is expected this year."

The fragile supply-demand structure of Bitcoin is also cited as a background for the decoupling. Researcher Yang explained, "Qualitative differences in the supply-demand structure are one of the main reasons for the decoupling between gold and Bitcoin. Since the introduction of ETFs, institutional funds have flowed into Bitcoin, advancing its inclusion as a regulated asset. However, its supply-demand structure still remains fragile. A significant portion of Bitcoin demand comes from individual investors, hedge funds, trading-oriented institutions, and ETF funds, all of which are highly sensitive to price volatility, liquidity, and investor sentiment. Bitcoin ETF funds, in particular, tend to move in and out quickly in pursuit of relative returns, rebalancing, and in response to changes in the macro environment, rather than holding for the long term."

'Gold and Silver as Defensive Assets vs. Bitcoin as a Growth Asset' Perception Grows

Due to ongoing geopolitical risks, the decoupling trend between gold, silver, and Bitcoin is expected to continue for the time being. Researcher Sim explained, "Essentially, as long as geopolitical risks persist, the decoupling trend between gold and Bitcoin is likely to continue. This is because gold is being highlighted for its central bank demand and traditional safe-haven characteristics, while Bitcoin is being emphasized for its volatility and investment asset nature."

An official from the virtual asset industry said, "In the short term, the decoupling trend between gold and Bitcoin is likely to persist, as the perception of gold as a defensive asset and Bitcoin as a growth asset becomes more entrenched. However, in the medium to long term, if global currency trust weakens or financial system risks resurface, it is possible that Bitcoin could once again show movements similar to gold. Ultimately, the key is how much more Bitcoin can be recognized as an 'alternative store of value' rather than a 'risky asset.'"