Bitcoin’s annual narrative often unfolds through the lens of its dollar value, which highlights a tumultuous fourth quarter marked by significant price fluctuations.
The price peaked at approximately $124,700 in late October before plummeting to the mid-$80,000s in November, resulting in a fall of over $40,000 from high to low.
This volatility prompted traders to question the stability of the market structure even as it sought recovery. However, if we consider Bitcoin’s value in terms of gold, the perspective changes significantly.
This alternative viewpoint reveals a largely unnoticed trend: an 11-month decline that has seen the BTC/XAU ratio fall nearly 45% since its January 12 peak, with this pattern remaining intact even after a slight increase in early December.
The Hidden Bear in the Dollar Chart
Despite weekly closes showing Bitcoin is only about 10% lower than its January levels in dollar terms, this diminutive decline conceals a path characterized by extreme volatility. This included a swift rise towards $125,000 followed by a sharp drop into the $80,000s within just weeks.
Even after stabilizing in mid-December, with a recovery from $89,348 on December 5 to just over $92,300 by December 12, the gold ratio depicts a far graver situation: a drawdown four times larger, spanning nearly a whole year without respite.
Insights from Cross-Asset Benchmarking
This discrepancy between episodic dollar volatility and ongoing weakness in gold terms prompts a broader discussion about what “true” returns look like for those considering Bitcoin a hard asset.
The decline in the ratio partly stems from gold’s rise as real-rate expectations softened and geopolitical tensions increased demand for safe-haven assets. This strength in gold compresses any asset priced against it, yet a consistent 46-week decline in the ratio signals a significant shift in investor sentiment towards hard assets throughout 2025.
Bitcoin’s Position as 2026 Approaches
For Bitcoin to emerge from this quiet bear market when measured in ounces of gold, the BTC/XAU ratio must break its nearly year-long downward trend, achieving higher weekly highs—something not seen since January. This requires both Bitcoin’s strength and gold’s stability, typically occurring during significant liquidity expansion and reduced demand for safe havens.
If gold maintains its strength or remains stable while Bitcoin continues to navigate through the aftermath of its autumn volatility, the ratio may decline further, creating a widening gap between those focused on dollar valuations and those utilizing cross-asset frameworks.
