After reaching all-time highs, gold is undergoing a notable correction. On October 21, the precious metal saw its steepest daily drop in more than 12 years.
Meanwhile, Bitcoin (BTC) has rallied, fueling speculation among analysts that capital may be shifting from gold to the leading cryptocurrency.
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Is the gold rally over?
BeInCrypto previously reported that gold had continued an uptrend this month. Even as the cryptocurrency market reeled from tariff-driven volatility following President Trump’s announcement, the traditional safe-haven asset attracted strong demand.
In fact, long queues were seen forming in front of bullion dealers as investors rushed to buy physical gold. Amid this rise, gold hit a new all-time high of $4,381 an ounce on Monday.
However, during gold’s record run, analysts warned of a possible market top and an imminent correction. His warnings were timely.
On Tuesday, gold prices plunged more than 6%, marking their biggest one-day drop since 2013. At press time, gold was trading at $4,129 an ounce, down about 5% over the past 24 hours.
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Professional trader Peter Brandt drew attention to the magnitude of gold’s latest sell-off, noting that the metal’s market capitalization plummeted by approximately $2.1 trillion in a single day.
“In terms of market capitalization, this decline in gold today is equivalent to 55% of the value of every cryptocurrency in existence. @PeterSchiff’s favorite stone lost $2.1 trillion in value today. That’s equivalent to $2.102 billion,” Brandt wrote.
What does historic gold crash mean for Bitcoin?
Meanwhile, as gold struggled, Bitcoin gained momentum. Data from BeInCrypto Markets showed that BTC was up 0.51% in the last 24 hours.
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At press time, it was trading at $108,491. According to analyst Ash Crypto, these divergent movements signaled that the capital rotation from gold to Bitcoin has begun.
Previously, Ash had forecast that October could bring a brief market slowdown before a powerful rally in the fourth quarter, starting with “parabolic candles probably towards the last 10 days of October.” According to him, the fourth quarter rally would take Bitcoin and altcoins to new highs. Therefore, the current change could probably be the first sign that its forecast is starting to come true.
“Yesterday I told you it was time for the big rotation from gold to bitcoin. Today the rotation began,” added Anthony Pompliano.
Additionally, market research firm Swissblock noted that Bitcoin rising as gold plummets is not new – the same pattern has emerged before.
“In April, gold crashed 5% in 3 days, just before Bitcoin broke out of its macro bottom and expanded, while gold consolidated. Investors’ flight to gold has created patterns that defy textbooks (indices rise, and so does gold). Gold and BTC are moving in opposite directions, this decoupling could be the window Bitcoin needs to end the year with a statement: Pump hard, Bitcoin style. “This could be the last chance,” the post says. read.
Amid this, attention has once again focused on Bitcoin’s long-term potential compared to traditional assets. Previously, Binance founder CZ predicted that Bitcoin would eventually overtake gold.
“Prediction: Bitcoin will turn into gold. I don’t know exactly when. It may take some time, but it will happen,” CZ said.
While it may be too early to predict such a change, the latest market conditions clearly favor Bitcoin. If this momentum continues, the current rotation could mark the early stages of a structural shift, one that defines the next chapter in the long-running rivalry between gold and Bitcoin.