Gold’s price dropped sharply on Tuesday, Oct 21, dropping more than 5.3% to $4,125 per ounce, making it the biggest single-day fall in over five years after the commodity reached an all-time high of $4,260 on Monday. This dip suggested that traders were taking profits after its strong rally over the past month.
Over the past two months, gold’s performance has far outpaced Bitcoin. The BTC-to-gold ratio fell roughly 30% since mid-August, reaching its lowest point since April’s tariff shock under President Donald Trump. During this period, Bitcoin declined about 12%, while gold surged nearly 30%, making it one of the top-performing investable assets of 2025.
Analysts attribute gold’s rally to a “risk-off” rotation amid trade tensions and believed that rising debt and falling real interest rates would reduce the value of money. Gold also benefited because the Federal Reserve is expected to cut rates later this month, with almost 99% probability, according to CME’s FedWatch tool. This kept demand high from individuals, central banks, and sovereign funds.
Bitcoin reacted to gold’s price drop by climbing back to $113,800 after falling below $108,000 earlier on Tuesday. However, the price has since dropped as of today and currently trades for $108,125, according to CoinMarketCap.
Joe Consorti from Horizon called this “the early stages of an aggressive catch-up trade.” In a tweet, he said fund managers are returning to risk due to expectations of a dovish Fed and easing geopolitical tensions. Bitwise researchers also suggested that even a modest reallocation from gold’s $17 trillion market could have an outsized impact on Bitcoin prices, with just a 2% rotation could potentially lift BTC above $161,000.
Meanwhile, long-term Bitcoin holders have been selling more coins, which is putting additional pressure on the market. According to a recent Glassnode report, long-term holders have surged from around 12,500 BTC per day in early July to 22,500 BTC per day recently. The firm said this shows an “excessive net distribution rather than passive maturation,” meaning older holders are selling rather than just holding.
Trader Peter Brandt pointed out the scale of the gold loss. In a tweet, he said that that decline wiped out $2.1 trillion in value, which is equal to 55% of the total crypto market.