Instead, macro factors including anticipation of a rate drop, a weakening dollar, significant ETF inflows, and central-bank purchasing have been the main drivers of this year's gold price surge. Can a Bitcoin selloff serve as a new catalyst for the bullion advance, given that prices already reflect most of that strength?
The question of whether a cryptocurrency crash will lead to an increase in the price of gold has resurfaced due to a significant decline in Bitcoin prices. Over time, the comparison between the two "stores of value" has only intensified. The gold rise in 2025, however, presents a different picture.This month, the price of bitcoin has dropped by around 25%, reaching a low of about $80,500 on Friday. The value of Bitcoin has been completely destroyed, even though the cryptocurrency token has recovered to $86,000.
What has caused the Bitcoin selloff?
According to a Bloomberg report, spot selling, which includes redemptions from major exchange-traded funds, long-dormant wallets liquidating holdings, and declining demand from momentum traders, has been the main cause of this most recent decline.
Bitcoin is a mirror and a reflection of the global liquidity situation, according to Kunal Shah, Head of Commodity Research at Nirmal Bang. The Japanese 10-year and 30-year bond yields hit their 20-year highs at the same time as Bitcoin's decline. "In general, capital moves from risk to safety when the fixed-income market experiences such volatility. And that's what's taking place. Shah clarified another factor contributing to the selloff in the cryptocurrency market by saying, "And that is the main reason why Bitcoin has collapsed the way it has collapsed."
According to a Bloomberg report, spot selling, which includes redemptions from major exchange-traded funds, long-dormant wallets liquidating holdings, and declining demand from momentum traders, has been the main cause of this most recent decline.
Bitcoin is a mirror and a reflection of the global liquidity situation, according to Kunal Shah, Head of Commodity Research at Nirmal Bang. The Japanese 10-year and 30-year bond yields hit their 20-year highs at the same time as Bitcoin's decline. "In general, capital moves from risk to safety when the fixed-income market experiences such volatility. And that's what's taking place. Shah clarified another factor contributing to the selloff in the cryptocurrency market by saying, "And that is the main reason why Bitcoin has collapsed the way it has collapsed."
Could the collapse of bitcoin benefit bullion?
In contrast to bullion, Bitcoin's attraction has diminished while gold has maintained its position.
Instead, macro factors including anticipation of a rate drop, a weakening dollar, significant ETF inflows, and central-bank purchasing have been the main drivers of this year's gold price surge. However, most analysts believe it is highly improbable that a decline in bitcoin will lead to a favorable scenario for gold, since most of that strength has already been represented in prices.
They claimed that gold should have been trading at $4,000 because prices had increased and undervalued the majority of the good fundamentals.
In contrast to bullion, Bitcoin's attraction has diminished while gold has maintained its position.
Instead, macro factors including anticipation of a rate drop, a weakening dollar, significant ETF inflows, and central-bank purchasing have been the main drivers of this year's gold price surge. However, most analysts believe it is highly improbable that a decline in bitcoin will lead to a favorable scenario for gold, since most of that strength has already been represented in prices.
They claimed that gold should have been trading at $4,000 because prices had increased and undervalued the majority of the good fundamentals.
"We think that gold will probably continue to consolidate, and the short-term upside will be extremely limited. There is absolutely no bullishness in the gold fundamentals. Shah said, "It has risen far above its fundamentals, and it is likely to consolidate and correct or witness some more profit-taking going forward."
Due to a lack of imminent triggers, MCX gold futures fell by about 1% during Monday's early morning trading. After a roughly 50% increase in 2025 alone, gold bulls have retreated as the Federal Reserve's rate drop hopes wane and the US dollar strengthens.
Due to a lack of imminent triggers, MCX gold futures fell by about 1% during Monday's early morning trading. After a roughly 50% increase in 2025 alone, gold bulls have retreated as the Federal Reserve's rate drop hopes wane and the US dollar strengthens.
According to Ross Maxwell, Global Strategy Lead at VT Markets, the future of gold is still cautiously optimistic, with more gains contingent on fresh developments.
Future gold prices would be influenced by deeper monetary easing, a fresh geopolitical crisis, or noticeably lower real rates. However, hazards like a stronger USD, higher real rates, or a decrease in central bank purchases might impede gains or make gold more sensitive, which could result in corrections, Maxwell continued.
Important levels of gold prices
Future gold prices would be influenced by deeper monetary easing, a fresh geopolitical crisis, or noticeably lower real rates. However, hazards like a stronger USD, higher real rates, or a decrease in central bank purchases might impede gains or make gold more sensitive, which could result in corrections, Maxwell continued.
Important levels of gold prices
According to Prathamesh Mallya, DVP Research-Non Agri Commodities and Currencies at Angel One, gold might rise between $4500 to ₹1,36,000 in the coming year. On the down side, it may test values of $3500 or ₹1,11,000. "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."
In a similar vein, Maxwell suggested using gold as a tool for diversification rather than as a short-term gain hedge. According to him, a modest allocation between 5 and 10% is ideal, with chances to add on dips if real yields decline and demand for safe havens increases.
In a similar vein, Maxwell suggested using gold as a tool for diversification rather than as a short-term gain hedge. According to him, a modest allocation between 5 and 10% is ideal, with chances to add on dips if real yields decline and demand for safe havens increases.
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