If you zoom out, the choice was obvious if you had to choose between metals and risky assets.
From a technical perspective, metals have prevailed over risky assets like Bitcoin [BTC].
So far this year, gold (XAU) is up about 6.8%, while BTC has corrected about 10.65%, suggesting that metals have remained structurally stronger than risky assets over the longer term.
But the bigger question now is whether this dynamic is starting to change. As the chart below shows, investors’ risk appetite is increasing rapidly. Over the past four weeks, inflows into risky assets have exceeded inflows into safe assets by a record $220 billion.
To put this in perspective, during the 2020 pandemic shock, safe assets attracted more than $500 billion in inflows compared to risky assets.
In short: investors are clearly moving up the risk curve again.
The most important takeaway? This divergence does not happen on its own. Federal Reserve candidate Kevin Warsh has reiterated his confidence in Bitcoin, even calling it “new gold.”
With Warsh being considered a potential next Fed chairman, his stance adds weight to how investors think about long-term capital allocation.
Against this backdrop, Bitcoin and gold’s uptrend may not yet be close to exhaustion, but instead signal the early stages of a broader capital rotation.
If this trend continues, could predictions calling for BTC to outperform gold by as much as 42% this year be less of a bold prediction and more of an early signal of where capital is headed?
Bitcoin’s market share expansion reinforces the bullish structure
The March cycle appears to have set the stage for the divergence discussed above.
While gold has maintained long-term outperformance against Bitcoin, the ratio closed in March up 17.67%, followed by another 13.03% gain in April, a combined rally of 30.7% in about 60 days.
This marks the strongest move since the Q2 2025 cycle, when the ratio exceeded 22%, signaling capital returning to BTC.
Still, it’s worth noting that the BTC/XAU ratio fell 43% last year, putting a spotlight on the story of over 40% Bitcoin outperformance over gold.
The Bitcoin-to-gold ratio may already have hit a cyclical low, with the price showing a clean retest of the all-time high ratio in 2017 and the bear market base range for 2022, levels typically associated with trend reversals.
Meanwhile, Bitcoin’s dominance has already increased by 2.3%, reinforcing Bitcoin’s strengthening market share.
All things considered, the BTC.D breakout, along with investors’ rising risk appetite, combined with the Fed’s outlook looking increasingly supportive of BTC, doesn’t look like a fluke.
Instead, it points toward a broader macro shift, with capital potentially returning to Bitcoin as the leading risk asset. In this context, BTC/XAU’s vertical expansion does not appear to be exhausted, but rather resembles the early stages of a larger move unfolding.
Therefore, projections of a 42% BTC/XAU outperformance by year end now seems more realistic.
Final summary
- Investors are returning to risky assets, preferring Bitcoin to gold.
- Bitcoin’s dominance and the BTC/Gold trend suggest that Bitcoin could outperform gold this year.