The Great Bitcoin Crash of 2025 caught investors off guard in a way few expected. Bitcoin fell nearly 30% from its October peak of $126,000, bringing its annual return down to barely 1% and leaving many wondering how such a powerful rally unraveled so quickly. Meanwhile, gold quietly dominated the year with a stunning 55% jump, breaking past $4,000 per ounce and forcing a renewed comparison between old and new stores of value.
Gold’s Rise and Bitcoin’s Broad Underperformance
What made the year feel even more surreal was how quickly sentiment shifted. Bitcoin had climbed to $123,500 in August and touched $126,000 in October, moments that felt like the beginning of another explosive cycle. But within weeks, most of those gains evaporated, and the cryptocurrency ended up losing about 40% against gold, a reminder that even the most popular digital assets can crumble under pressure.
Gold, on the other hand, moved with calm resilience. It crossed $4,300 per ounce, supported by expectations of U.S. rate cuts and the constant hum of global trade tensions. In contrast, safer instruments like T-bills quietly outperformed Bitcoin, reinforcing how risk-averse investors became as crypto markets wobbled and traditional assets proved far steadier.
Behind the crash, a familiar combination of problems resurfaced. Liquidity thinned, leverage spiked, and broader macro conditions turned against risk assets. Throughout the year, Bitcoin behaved more like a high beta equity than a safe haven, something investors could feel each time markets dipped. A decade of data made it clear that Bitcoin’s correlation with stocks remained strong, while gold kept its traditional weak or negative correlation with the S&P 500.
The public conversation grew louder as the crash deepened. Peter Schiff repeated his claims that Bitcoin was “a fraud,” while Robert Kiyosaki insisted it remained “people’s money” regardless of the turmoil. At the same time, regulators added pressure with mixed signals, and cybersecurity issues only worsened outflows. By the end of 2025, the crash had redefined how investors evaluate Bitcoin’s risk, while gold reclaimed the spotlight as the safer anchor. Now, all eyes are on the Federal Reserve’s next moves and the regulatory roadmap that will shape what comes next in 2026.