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After a powerful multi-month rally, gold crashed on Oct. 21. It was the biggest gold price drop in more than a decade, falling from $4,330 to $4,030 in just a few hours. Gold\u2019s market cap dropped by $2.1 trillion in a single day. As this amount is over half of the total crypto market cap, it raises the question of whether digital gold is a more reliable long-term investment than physical gold.<\/p>\n
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Gold is having an immense 2025. Even now, after a historic downturn, its value is still up<\/a> 55% compared to the 2024 year-end price. That\u2019s more than in the years of the 9\/11 attacks, the 2008 financial crisis, or the COVID-19 shutdown (cataclysms that usually drive demand for gold).<\/p>\n Some analysts warned investors that the gold price had overheated. For instance, a few days before the crash, in response to Benzinga\u2019s questions, the CEO of Coin Bureau, Nick Puckrin, said that gold might take a downturn. He said<\/a> that the current gold rush is a \u201cmomentum trade\u201d and \u201cmomentum trades have a tendency to fizzle out.\u201d<\/p>\n Several analysts were projecting the continuation of the uptrend. Goldman Sachs saw<\/a> gold reaching $4,900 per ounce by December 2026, while UBS provided<\/a> a more bullish prediction: $4,700 in Q1 2026.<\/p>\n Bloomberg cites<\/a> several strategists, including Charlie Massy-Collier, as saying that in the coming weeks, the price may consolidate at the $4,000 level. Banks will need gold to keep diversifying away from the U.S. dollar, but \u201cat current levels, there is no rush to position for that.\u201d<\/p>\n Donald Trump\u2019s Monday comments on the planned trade negotiations with China (\u201cboth of us will be happy,\u201d Trump said<\/a>) and the USD strength hike are cited as major factors for the gold price slide. These optimistic events stimulated investors to take profits.<\/p>\n Bitcoin is usually compared to gold as another scarce safe-haven asset. Its 21 million-unit hard cap, ever-declining supply growth, and costly mining give it long-term appreciation akin to gold.<\/p>\n Both Bitcoin and gold are viewed as debasement trade assets. Debasement trade refers to the avoidance of investment in sovereign debt and fiat currencies, as their value is too dependent on the actions of financial and political institutions.<\/p>\n Despite common ground, there is some mutual ribbing and banter between gold bugs and bitcoiners. For instance, experienced stockbroker Peter Schiff is a prominent Bitcoin critic, advocating for gold.<\/p>\nGold vs Bitcoin<\/h2>\n