Gold saw its worst one-day plunge in more than a decade on October 21st 2025, wiping out $2.1 trillion in market cap. This sharp decline has led analysts to speculate about a significant capital rotation into Bitcoin, prompting discussions on the evolving dynamics between these two asset classes. However, a rotation into Bitcoin can be an indication of an even bigger change in the investment trend as Bitcoin is gaining more strength.
Gold’s Historic Decline
The asset’s market capitalization plummeted by 55% of the total value of all cryptocurrencies, which is currently estimated at $3.7 trillion. The value of the yellow metal dropped over 6% in a single trading day after its historic high at $4,381 per ounce. The price had moved at around $4,026 an ounce on October 22, 2025, an abrupt decline after the continued demand.
Bitcoin’s Rebound
In contrast, Bitcoin witnessed a price boost as gold fell. Bitcoin rose by 0.51% within the same 24-hour period, trading at approximately $108,491. Moreover, this movement suggests a growing interest in Bitcoin as a more favorable investment option, as capital appears to be shifting from gold to this leading cryptocurrency.
Market Implications
The dynamic between gold and Bitcoin is becoming complicated. The gold selloff was explained by seasoned trader Peter Brandt in terms of event size, since the event has become the market’s moment in time. The move, besides emphasizing Bitcoin’s store-of-value function, has occasioned debate about its sustainability over the longer term versus traditional assets.
Anthony Pompliano, a staunch Bitcoin advocate, said that the “great rotation” into Bitcoin from gold has probably started. That is based on a look at trends in the market, with past drops in gold previously occurring in tandem with rallies by Bitcoin. With an evolving sentiment in the market, most investors are reassessing positions in both asset classes.
