Senior Bloomberg ETF analyst Eric Balchunas has defended Bitcoin as “digital gold,” despite its relative underperformance against physical gold last year.
Responding to Deutsche Bank strategist Marion Laboure’s BTC “no longer digital gold” remarks, Balchunas retorted,
“This is a fine argument to make, but to hinge it on one year’s returns is absurd. Does that mean it was digital gold in 2023 and 2024 when it was up 450%? But now it isn’t because gold did better in 2025. Make it make sense.”
For the unfamiliar, BTC underperformance worsened after the October crash, and fears of a four-year cycle exacerbated the weakness into 2026.
The results? BTC closed 2025 at a 6% loss, while gold posted a massive 65% gain – The highest annual return in over 10 years.
When zoomed out, however, Balchunas’ argument is solid. Since 2012, BTC has only underperformed gold during its bear market cycles. The red years in 2014, 2018, and 2022 saw gold outperform it by 50-70%.
However, over the remaining 10 years, BTC has outperformed gold, posting double to triple-digit gains.
Are ETF outflows dragging BTC?
The ongoing muted demand from U.S Spot BTC ETFs has compounded the asset’s weakness over the past few weeks. The ETF complex demand turned negative last November, with the flows not recovering as of February 2026.
On the contrary, gold ETFs fell to zero in December but saw renewed demand, boosting inflows to $10 billion. Unless BTC ETF flows turn positive and close the gap with gold, the divergence would signal more weakness for the crypto asset.
However, it’s not all gloom for BTC. According to the BTC/gold ratio, a key indicator that tracks the crypto asset’s relative performance to gold, the ongoing pullback might be approaching a key support.
According to the ratio, BTC peaked in late 2024 after hitting 40 ounces of gold. And, the crypto’s bullish structure broke last October after it cracked below the trendline support (white).
At the time of writing, the ratio was at 13 – Down nearly 70% from its peak. This suggested that gold has outperformed BTC by 70% since late 2024.
However, a similar BTC/gold ratio pullback in the 2022 bear market eased near 9, making it a key support to watch out for a potential reversal.
Final Thoughts
- Despite lagging behind gold in 2025, Bitcoin has dominated annual investor returns ten times since 2012.
- Weak ETF inflows have further accelerated Bitcoin’s decoupling from gold.
