The Breakdown Is the Gold to Bitcoin Rotation Underway?
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Oct 23, 2025 Gold's recent one-day drop raises questions about a potential shift to Bitcoin. The impact of capital moves from gold’s $20 trillion market could lead to significant gains for Bitcoin. Discussions include a new Fed policy that may ease access for crypto firms and Tether's rapid growth reaching 500 million wallets. Additionally, the growing interest in ETFs and the transformation of Bitcoin's market dynamics highlight a crucial moment for the cryptocurrency. The ongoing interplay between traditional finance and digital assets creates exciting opportunities.
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Gold's Blow-Off Was Levered And Unwieldy
- Gold's rally was an extreme outlier this year, surging well above its typical ~6% CAGR.
- The sudden 6.3% one-day drop likely reflected leveraged positions and a margin requirement spike rather than a single news event.
Bitcoin May Trail Gold's Moves
- Traders observed pattern where Bitcoin often trails major gold moves by months, suggesting potential follow-through after gold's spike.
- A brief Tuesday session showed Bitcoin initially up then giving back gains, so rotation signals remain inconclusive.
Small Flows Could Move Bitcoin Big
- Bitwise estimated that a small 3–4% rotation out of gold could potentially double Bitcoin's price from current levels.
- The market briefly priced that possibility, with Bitcoin spiking ~5% during gold's collapse before reversing.