Gold demand reached an all-time high of $555 billion in 2025, driven by an 84% jump in investment flows and $89 billion flowing into physically backed ETFs.
The World Gold Council reported that ETF holdings increased by 801 tonnes to a record 4,025 tonnes, while assets under management doubled to $559 billion. US gold ETFs alone absorbed 437 tons, bringing the domestic holdings to 2,019 tons and a value of $280 billion.
This marked a change in the institutional position.
Meanwhile, Bitcoin lost holders in the first two months of 2026. The US Spot Bitcoin ETF recorded net outflows of over $1.9 billion in January.
As of February 9, the Spot Bitcoin ETF held 1.41 million BTC worth $100 billion worldwide, which is about 6% of Bitcoin's fixed supply. But the tapes suggest that capital is flowing out rather than flowing in.
Gold's rally validates Bitcoin's devaluation thesis and raises the question of whether Bitcoin is catching the next wave of flows or whether allocators have already assigned Bitcoin to a completely different risk bucket.
what actually changed
Gold investment demand reached 2,175 tonnes in 2025, an 84% year-on-year increase.
Using the World Gold Council's average price of approximately $3,431 per ounce, the notional investment demand equates to approximately $240 billion. This number is driven by ETF adoption, central bank purchases, and currency stability concerns rather than cyclical growth concerns.
The People's Bank of China has purchased gold for 15 consecutive months and holds 74.19 million ounces worth $369.6 billion as of January 2026.
The IMF notes that global debt remains above 235% of global GDP, making hard collateral attractive regardless of growth expectations.
Gold's 2025 run, which set an all-time high of 53, was not a trade. This has renewed the question of the role of strategic reserves as government budget deficits continue and confidence in the stability of fiat currencies weakens.
Proponents of Bitcoin argue that it serves the same function: an irresponsible asset that is immune to rupture. But the ETF tape tells a different story.
While gold funds doubled their assets under management, Bitcoin ETFs lost capital. If the allocator considers the two to be substitutes, the flows will track each other. it's not.
| metric | Values for January-February 2025/2026 | direction | interpretation |
|---|---|---|---|
| Gold: aggregate demand (value) | $555 billion (2025) | ↑ | Record amount of demand = re-pricing of “strategic collateral” rather than just cyclical buying |
| Gold: Investment demand | 2,175t (2025) | ↑ | Investment-driven bidding (allocation behavior) consistent with macro/sovereign hedging |
| Gold: Physically backed ETF inflows | $89 billion (2025) | ↑ | Institutional channels do the work. ETF wrapper is a sending mechanism |
| Gold: Trends in ETF holdings | +801t (2025) | ↑ | Accumulation of holdings (not just price) → sustainable positioning rather than quick transactions |
| Gold: Year-end ETF holdings | 4,025t (Highest ever, 2025) | ↑ | New “inventory” peak strengthens idea of structural allocation shift |
| Gold: Gold ETF AUM | $559 billion (2025) | ↑ | Doubling of assets under management signals increased exposure and mandates for institutional investors |
| Gold: Absorbed US gold ETF | +437t (2025) | ↑ | US institutions participated substantially. It’s not just an emerging market/central bank story |
| Gold: US gold ETF holdings | 2,019t (2025) | ↑ | Enhanced domestic stockpiles support “gold rerating”/reserve-like framework |
| Gold: US Gold ETF AUM | $280 billion (2025) | ↑ | Concentrated capital base: US ETF complex is key driver of gold bid |
| Bitcoin ETF: NetFlow (US Spot ETF) | -$1.9 billion (January 2026) | ↓ | Risk aversion/liquidation pressure. “Tape” contradicts the story of pure sleaze |
| Bitcoin ETF: Global holdings (Spot ETF) | 1.41 million BTC (February 9, 2026) | — | A large installed base remains, but flows are a small signal (and they are negative) |
| Bitcoin ETF: Holding value | ~$100 billion (February 9, 2026) | — | Scale makes sense, but capital is flowing out rather than growing. |
| Bitcoin ETF: Share of BTC Supply | ~6% (February 9, 2026) | — | Concentrated “wrapper ownership” is large enough that flows can become important at the margin |
small percentages and big numbers
This hypothetical exercise is important because it quantifies the impact of small-scale reallocations on Bitcoin's marginal bid.
Starting with $559 billion in global gold ETF assets under management, a 0.25% rotation would equate to $1.4 billion, or about 19,900 BTC, at the current price of about $70,212. At 0.5%, the 2x yield would be $2.8 billion and 39,800 BTC.
The full percentage point is worth $5.6 billion, enough to purchase approximately 79,600 BTC, which equates to 6.3% of existing US Spot ETF holdings, or approximately 177 days of issuance post-halving at 450 BTC per day.
Using $89 billion in gold ETF inflows in 2025 as an alternative baseline, the same experiment yields a smaller but meaningful number. A 0.25% reallocation is equivalent to $222 million, or approximately 3,170 BTC, and a 0.5% reallocation is equivalent to $445 million, or approximately 6,340 BTC.
At 1%, this number increases to $890 million, or approximately 12,700 BTC.
The third base is based on $240 billion of gold investment demand derived from 2025. The quarter, 0.5 percent, and 1 percent reallocations are equivalent to $600 million (8,550 BTC), $1.2 billion (17,100 BTC), and $2.4 billion (34,200 BTC), respectively.
These are not predictions. This is a sensitivity check. But they are clear about the stakes. Even if you were to allocate 0.5% of gold ETF assets, that would be an order of magnitude capital outflow comparable to the worst monthly Bitcoin outflow in recent memory.
The problem is that there is no mechanism to force that rotation, and the current behavior suggests that the allocator is treating the two assets as complements in different portfolios, rather than as substitutes within the same mandate.
On January 30th, we will teach you what Bitcoin is.
Gold prices fell by nearly 10% on January 30, the steepest single-day decline since 1983, after Kevin Warsh's nomination as Treasury Secretary raised concerns about balance sheet tightening and CME raised margin requirements.
Silver plunged 27% on the same day. Bitcoin fell 2.5% to about $82,300, in a move Reuters apparently linked to liquidity concerns stemming from a possible shrinking of the Federal Reserve's balance sheet.
Gold and silver did not act like stable insurance. Stock prices fell amid easing of hawkish liquidity shock and leverage wave. Bitcoin has also joined the mix.
By February 9, the gold price had recovered to around $5,064 as the dollar weakened and the market reconsidered its interest rate cut. However, the January 30th tape revealed something significant. In 2026, Bitcoin will still be traded as a liquidity barometer in the event of a policy tightening shock, rather than as insurance against fiat currency declines.
This distinction is important for rotation theory. If the main drivers of capital towards gold are sovereignty concerns and debt sustainability, Bitcoin would theoretically benefit.
However, if the transmission mechanism includes strict policies or margin calls, Bitcoin behaves more like risk-on-leverage than collateral.
Public expectations remain bullish on gold. UBS is targeting more than $6,200 an ounce in the second half of 2026, JPMorgan is targeting $6,300 and Deutsche Bank is targeting more than $6,000. However, these forecasts assume that gold will benefit from both concerns about deterioration and safe haven demand in times of stress.
Bitcoin has demonstrated the former, but not the latter.
When a downgrade trade could benefit Bitcoin
The system supporting Bitcoin is one in which the market expects policy easing, balance sheet expansion, and a weaker dollar. This situation drives up assets that benefit from abundant liquidity.
A Reuters commentary explicitly links Bitcoin and gold as a hedge for balance sheet expansion, and the World Gold Council notes that lower yields, a weaker dollar, safe-haven demand and momentum supported ETF inflows in 2025.
For Bitcoin to win rather than just follow, two conditions need to hold true: spot ETF inflows continue, rather than a reflexive rebound, and leverage becomes less reflexive, which can amplify declines during liquidity shocks.
Recent months have shown the opposite. Capital outflows continue, and the correlation between Bitcoin and risk assets remains high even under stress.
A clear hypothesis explains the stakes. If Bitcoin were to acquire 1% of the world's gold ETF assets managed in a depreciation-driven regime, that would be approximately $5.6 billion in incremental purchases, or approximately 80,000 BTC at $70,000, or 6% of current U.S. spot ETF holdings.
That's not a small number. But we need a catalyst strong enough to not only align the narrative, but also change the behavior of the allocator.
what to see
Dollar and real interest rate expectations will drive the next leg. The direction of DXY, clear signals on balance sheet policy, and the speed of Fed rate cuts will determine whether the environment favors a broad range of hard assets or only those with established safe-haven credibility.
The January 30th shock showed sensitivity to liquidity conditions. A shift to easing policies could turn the scenario upside down.
ETF flows provide the clearest indication of the allocator's intent. Comparing weekly inflows to the gold ETF and daily inflows to the US Spot Bitcoin ETF shows whether capital is treating Bitcoin as an alternative store of value or as a high-beta macro trade.
China's continued accumulation of gold through 15 consecutive months of central bank purchases supports the acquisition of sovereign hard collateral and sets the standard for how nation-states position themselves.
Forecasts for gold centered around $6,000 to $6,300 per ounce create a testable scenario. If gold consolidates and then reaccelerates towards those goals, will Bitcoin follow suit or diverge?
The answer will reveal whether the theory of falling land prices will lead to demand for Bitcoin, or whether institutional investor capital flows will remain locked in traditional hard assets that are more liquid and have clearer regulations.
fundamental question
A year with $555 billion in demand for gold didn't mean traders were ahead of inflation. It involved central banks, sovereign wealth funds, and institutional investors repositioning for a world in which debt levels, monetary stability, and geopolitical fragmentation are more important than short-term growth cycles.
Bitcoin follows the same macro logic, but Bitcoin's behavior during the January 30th shock and ETF outflows in the months preceding it suggests that allocators still view Bitcoin as a liquidity-sensitive asset rather than an irresponsible reserve.
Rotation calculations show what is possible if that perception changes.
A 1% reallocation from gold ETF assets could move the market. But possibility is not probability, and current flows in the opposite direction.
Bitcoin doesn't need money to fail. We need a catalyst to convince the same institutions that drove gold’s record year that Bitcoin belongs in the strategic collateral bucket rather than the speculative beta sleeve. So far, that catalyst has not arrived.
