Bitcoin’s reputation as “digital gold” is facing an unexpected test. According to a new analysis highlighted by BlockBeats, the value of Bitcoin priced in gold has dropped 20% from its all-time high in August. The decline has reignited a familiar debate, with economist and long-time cryptocurrency critic Peter Schiff declaring on social media that Bitcoin has entered a bear market at least when measured against the metal it often claims to rival.
Why Gold Matters in the Bitcoin Conversation
For years, Bitcoin advocates have positioned the cryptocurrency as a digital alternative to gold: scarce, decentralized, and resistant to inflation. Comparing Bitcoin to gold offers a way to judge whether it is preserving value against a historically stable benchmark rather than volatile fiat currencies like the U.S. dollar.
By this measure, Schiff argues that Bitcoin’s 20% drop is more alarming than a similar decline in dollar terms. A 10% move against the dollar can be dismissed as currency fluctuation, but a double-digit slide against gold—an asset prized for its stability signals that Bitcoin is losing ground against the very store-of-value narrative that supports its long-term thesis.
Context Behind the Ratio
The Bitcoin–gold ratio measures how many ounces of gold one Bitcoin can buy. This ratio hit a record high in August 2025 when Bitcoin’s dollar price surged to new all-time highs above $122,000 while gold traded near $2,500 per ounce. Since then, Bitcoin’s price has softened in both dollar and gold terms, but the decline against gold has been sharper due to the metal’s relative stability.
Market data shows the ratio now hovering around levels last seen before the July rally. While this does not automatically signal a structural bear market, it suggests that gold has outperformed Bitcoin in recent weeks an outcome that undercuts the narrative of Bitcoin as a superior inflation hedge.
Diverging Views on Market Significance
Not all analysts agree with Schiff’s interpretation. On-chain metrics remain strong, with exchange reserves near multi-year lows and network activity holding steady. Proponents argue that gold is simply benefiting from short-term macro trends such as central bank buying and geopolitical uncertainty, while Bitcoin is consolidating after a rapid multi-month rally.
Some traders even view the ratio’s decline as a healthy reset. When Bitcoin vastly outpaces gold, speculative excess can build. A pullback against a stable benchmark may reduce leverage and create a stronger base for the next advance.
Broader Market Picture
The debate comes as Bitcoin faces other critical inflection points. Research firm Matrixport recently identified $109,899 as the key threshold for maintaining bull market momentum, while whale selling and record-low volatility have tightened the market’s range. In dollar terms, Bitcoin remains well above its 2024 highs, but its struggle to outperform gold underscores how challenging it can be to hold its narrative as a “digital safe haven” during periods of macroeconomic uncertainty.
The Takeaway
Whether the gold-based bear market claim holds long-term significance remains to be seen. For investors tracking Bitcoin’s evolution from speculative asset to digital store of value, the Bitcoin–gold ratio offers a sobering reminder: narratives can shift quickly, and even the strongest rallies are tested when measured against one of the oldest and most trusted forms of wealth preservation.