How Gold's Sell-Off Could Push Bitcoin to $200,000

Author: Dilip Kumar Patairya, Source: Cointelegraph, Compiled by Shaw Jinse Finance 1. How the Gold Rush Ends in October 2025 Driven by strong safe-haven demand, gold prices surged, surpassing $4,300 per ounce, a record high. By October 2025, profit-taking began to take hold. On October 17, 2025, gold prices fell over 2% after reaching the milestone. As of press time, the spot gold price was approximately $4,023 per ounce, down 8.1% from its all-time high of $4,378.69. The primary trigger for this decline was the easing of Sino-US trade tensions after US President Trump stated that a comprehensive tariff increase on China was unsustainable. Furthermore, a stronger US dollar and renewed investor interest in high-yield assets like Bitcoin also contributed to the pullback. 2. Gold's History: Plunges and Peaks The history of gold prices is filled with dramatic ups and downs, influenced by inflation, interest rates, and geopolitical events. From its peak in the early 1980s to a sharp correction after 2013, to a strong rebound in the 2020s, and finally to the decline in October 2025, the gold market has experienced several ups and downs. 1980-1999: Driven by high inflation and geopolitical tensions, gold prices surged, peaking at approximately $850 per ounce in January 1980. Gold's rally was then brought to an end when then-Federal Reserve Chairman Paul Volcker sharply raised interest rates, triggering the "Volcker Shock." Between 1980 and 1982, the Fed pushed the federal funds rate above 20% to curb inflation, triggering a severe recession. This triggered a massive sell-off that sent gold prices plummeting by more than 60% by 1982 and ushered in a secular bear market. Gold prices plummeted from approximately $850 per ounce in 1980 to approximately $278 per ounce in 1999. 2012-2018: After peaking in 2011, gold prices began a long period of decline as the global economy stabilized and stock markets outperformed, reducing its investment appeal. In 2013, the Federal Reserve began tapering its quantitative easing program, leading to a strengthening dollar and a shift toward higher-yielding assets, further pressuring gold prices. Holdings of the SPDR Gold Trust, the leading gold-backed exchange-traded fund (ETF), fell by over 30%, indicating waning investor interest. From 2014 to 2018, gold prices fluctuated between $1,200 and $1,400 per ounce, significantly lower than the 2012 level of approximately $1,680. 2020s: During the 2020s, gold regained its status as a safe-haven asset amidst global uncertainty. The COVID-19 pandemic, which slammed economies, prompted governments to roll out stimulus packages exceeding $10 trillion, raising concerns about inflation. By 2022, U.S. inflation had climbed to over 9%, solidifying gold's position as a financial safeguard. Central banks also increased their gold purchases, adding approximately 1,000 tons annually between 2022 and 2024. Even with rising interest rates, the price of gold rose from over $1,785 in 2020 to over $3,200 by early 2025. However, the decline in gold prices in October 2025 led investors to seek alternatives such as Bitcoin, which is relatively unaffected by government and central bank policies.

3. How Money Began to Flow into Bitcoin

The term "digital gold" is gaining popularity, with younger investors increasingly viewing Bitcoin as a modern hedge against inflation and currency devaluation. Many believe that Bitcoin is more accessible and innovative than physical gold, causing its market capitalization to soar from US$134 billion in 2019 to over US$2.4 trillion in the first half of 2025. Spot Bitcoin ETFs and exchange-traded products (ETPs) offer institutional investors professional-grade investment channels, attracting billions of dollars in compliant inflows. In early October 2025, US spot Bitcoin ETFs saw a record weekly inflow of $3.55 billion, with BlackRock's iShares Bitcoin Trust (IBIT) performing particularly well, helping propel Bitcoin's price past $126,000. Meanwhile, gold ETFs have seen outflows exceeding $2.8 billion in recent weeks, a stark contrast to Bitcoin's strong momentum. Historically, gold outflows have been inversely correlated with Bitcoin inflows, with Bitcoin's correlation with gold dropping to -0.3 during periods of high risk-on sentiment. Exchange balances have fallen to a six-year low of 2.83 million Bitcoin, indicating waning selling pressure. 4. $200,000 Bitcoin: Is this a realistic target? Bitcoin's path to $200,000 appears supported by strong market and macroeconomic factors. The April 2024 halving reduces the block reward, tightening supply amid growing demand. Multiple indicators continue to point to steady Bitcoin growth. As global debt continues to climb, Bitcoin's appeal as a decentralized investment asset continues to grow. By the first half of 2025, global debt had reached nearly $338 trillion, or approximately 235% of global GDP. Institutional catalysts driving Bitcoin adoption are strengthening. As of October 24, 2025, Strategy (MSTR) held 640,418 Bitcoins, followed by Marathon Digital Holdings (MARA) and Celsius (CEP), holding 53,250 and 43,514 Bitcoins, respectively. The Federal Reserve's moves to ease monetary policy could provide an additional boost. The $200,000 level is a strong psychological benchmark that could prompt investors to pull funds from assets like gold, with $2.8 billion already flowing out of gold ETFs. 5. How Money Shifts from Gold to Bitcoin Shifts from gold to Bitcoin often define major market cycles, highlighting how investor preferences evolve over time. Key cycles include: 2013-2017: From 2013 to 2017, gold prices remained largely between $1,200 and $1,400 per ounce after peaking in 2011, while Bitcoin soared from $100 to $20,000. This rally was driven by retail investors seeking a decentralized alternative to money. 2020-2021: Institutional adoption drove Bitcoin's price to $69,000 in 2020 and 2021, as pandemic-era stimulus measures and inflation concerns prompted firms like Strategy to favor Bitcoin over gold. Historically, gold has attracted cautious investors during periods of stability, but during periods of risk-on, Bitcoin tends to attract funds due to its scarcity and growth potential. Recent trends have reinforced this shift. In October 2025, Bitcoin ETFs saw $3.55 billion in weekly inflows, while gold ETFs saw $2.8 billion in outflows. These flows highlight the ongoing investor shift toward digital assets amid ongoing global uncertainty. 6. Bitcoin's Obstacles to $200,000: While cryptocurrency enthusiasts expect Bitcoin to reach $200,000, the road ahead isn't smooth. Obstacles include price volatility, regulatory uncertainty, the potential for a gold recovery, and competition from other assets: Bitcoin's Volatility: Like all cryptocurrencies, Bitcoin is highly volatile, subject to dramatic ups and downs. Buying by institutional investors can trigger price increases, while selling by large holders ("whales") can lead to abrupt price drops. Regulatory Uncertainty: Bitcoin regulation is still evolving in many regions around the world. Continued ambiguity regarding taxation and compliance could hinder institutional participation. Gold's Potential Recovery: In October 2025, some investors who had experienced strong returns began withdrawing funds from gold mining ETFs. Meanwhile, Reuters reported that global cryptocurrency ETF inflows hit a record $5.95 billion in the third week of October 2025. Strong demand for cryptocurrency assets has driven Bitcoin to a new all-time high. However, gold could still make a comeback as a safe-haven asset. Competition from other assets: Stocks, with an average annual return of approximately 10%, compete with digital assets. Tokenized government bonds and central bank digital currencies (CBDCs) also offer stable alternatives. These options could divert funds from Bitcoin. 7. Generational shift in store-of-value assets Generational shifts are redefining perceptions of store-of-value assets. Younger investors who grew up in the digital age are increasingly favoring Bitcoin due to its decentralized, borderless nature and potential high returns. In contrast, older investors still prefer gold due to its physical form and proven stability. The growing digitalization of finance is accelerating this transformation, with blockchain technology replacing slow, paper-based systems with a more transparent and efficient alternative.

However, over time, gold and Bitcoin may be able to coexist in a dual-layered hedge model. Gold offers reliability through its physical scarcity and historical record, while Bitcoin offers growth through its limited supply and digital adaptability. Together, they balance tradition and innovation, reflecting how investors are adapting to an increasingly complex financial world.