Senior Bloomberg ETF analyst Eric Balchunas has defended Bitcoin as “digital gold,” despite its relative underperformance against physical gold last year.
In response to Deutsche Bank strategist Marion Laboure’s comments about “no longer digital gold” at BTC, Balchunas said replied,
“This is a great argument to make, but to base this on one-year returns is absurd. Does that mean it was digital gold in 2023 and 2024, when it rose 450%? But now it doesn’t because gold outperformed in 2025. Make sure it makes sense.”
For those unfamiliar, BTC’s underperformance worsened after the October crash, and fears of a four-year cycle have exacerbated weakness through 2026.
The results? BTC ended 2025 with a loss of 6%, while gold posted a massive 65% gain – the highest annual return in more than 10 years.
Source: Kromme
Zoomed out, however, Balchunas’ argument is solid. Since 2012, BTC has only underperformed gold during its bear market cycles. In the red years of 2014, 2018 and 2022, gold outperformed by 50-70%.
However, over the remaining 10 years, BTC has outperformed gold, with double- to triple-digit gains.
Are ETF Outflows Holding Back BTC?
Continued subdued demand from US Spot BTC ETFs has added to the asset’s weakness in recent weeks. Demand for the ETF complex turned around negative last November, with flows not recovering as of February 2026.
Source: BOLD report
On the contrary, gold ETFs fell to zero in December but saw renewed demand, driving inflows to $10 billion. Unless BTC ETF flows turn positive and close the gap with gold, the divergence would indicate more weakness for the crypto asset.
However, it’s not all gloom for BTC. According to the BTC/gold ratio, a key indicator that tracks the relative performance of crypto assets versus gold, the ongoing pullback could be approaching a key support point.
Source: BTC/gold ratio, TradingView
According to the ratio, BTC peaked in late 2024 after reaching 40 ounces of gold. And the crypto’s bullish structure broke last October after breaking below the trendline support (white).
At the time of writing, the ratio was 13 – almost 70% lower than the peak. This suggested that gold has outperformed BTC by 70% since the end of 2024.
However, a similar decline in the BTC/gold ratio in the 2022 bear market narrowed to almost 9, making this a key support to watch for a possible reversal.
Final thoughts
- Despite lagging behind gold in 2025, Bitcoin has dominated annual investor returns ten times since 2012.
- Weak ETF inflows have further accelerated Bitcoin’s decoupling from gold.