A steep fall in Bitcoin has revived the long-running question: Can a crypto crash give a fresh boost to gold prices?
While both assets are often compared as “stores of value,” the 2025 rally in gold shows a different trend.
Bitcoin Drops 25% as Crypto Market Loses $1.2 Trillion
Bitcoin slipped nearly 25% in November, touching a low near $80,500 before recovering to $86,000.
In the past six weeks alone, almost $1.2 trillion has evaporated from the global crypto market, according to CoinGecko.
Why Bitcoin is Crashing
The latest crypto decline has been driven by:
- Large ETF redemptions
- Selling from old dormant wallets
- Weak demand from momentum traders
- Tightening global liquidity
Kunal Shah, Head of Commodity Research at Nirmal Bang, explained that Bitcoin closely reflects global liquidity. Rising Japanese bond yields and turbulence in fixed-income markets have triggered a shift from risky assets to safe-haven options, weighing heavily on crypto.
Can Bitcoin’s Meltdown Boost Gold Prices?
While Bitcoin struggled, gold stayed firm, improving bullion’s appeal.
However, analysts remain cautious about expecting a major gold rally purely because of Bitcoin’s weakness.
Gold’s 2025 Rally Already Priced In
This year’s gold surge has been supported by:
- Rate-cut expectations
- Weaker US dollar
- Strong ETF inflows
- Heavy central-bank buying
Analysts believe gold has already priced in most of these positives. Many say gold should have been trading near $4,000 based on fundamentals alone.
Near-Term Outlook
Shah warns that gold may now:
- Consolidate
- See limited upside
- Face profit booking
He added that gold’s fundamentals are not strongly bullish in the immediate term.
Market Reaction: Gold Slips as Dollar Strengthens
On Monday morning, MCX gold futures dropped nearly 1%, with investors turning cautious.
Expectations of delayed Federal Reserve rate cuts and a firmer US dollar have slowed momentum after gold’s nearly 50% gain in 2025.
What Experts Expect Next for Gold
Ross Maxwell from VT Markets maintains a cautiously positive view but says gold needs new triggers for a breakout.
Possible bullish triggers:
- Deeper monetary easing
- Geopolitical tensions
- Lower real yields
Risk factors:
- Stronger USD
- Higher real yields
- Reduced central-bank purchases
Key Gold Price Levels to Watch
Upside Targets
Prathamesh Mallya (Angel One) expects:
- Gold may rise to $4,500
- ₹1,36,000 on the domestic market in the next 12 months
Downside Risk
Gold could fall towards:
- $3,500
- ₹1,11,000
Despite weaker hopes for Fed rate cuts, he notes that central-bank buying, safe-haven demand, and geopolitical risk could keep gold in a long-term uptrend.
Portfolio Strategy
Maxwell advises using gold as a diversification asset, not a short-term hedge.
He suggests a 5–10% portfolio allocation, with opportunities to buy more during declines.
