Gold wins the debasement trade in 2025, but it is not the full story

Group 1: Market Performance - Gold had a remarkable year in 2025, increasing by 65%, while Bitcoin experienced a decline of 7% [1] - Up until August, both gold and Bitcoin had similar returns, each rising approximately 30%, but gold surged significantly thereafter while Bitcoin fell sharply [1] Group 2: Bitcoin Recovery and Capital Flows - Bitcoin is currently in recovery mode following a 36% correction from its all-time high in October, struggling around the $80,000 range [2] - Despite Bitcoin's price weakness, capital flows into Bitcoin exchange-traded products (ETPs) outpaced those into gold ETPs in 2025 [2] Group 3: Institutional Adoption and ETF Resilience - The introduction of U.S. spot Bitcoin ETFs in January 2024 marked the beginning of institutional adoption, with strong participation continuing into the second year despite price declines [3] - Total assets under management (AUM) for Bitcoin ETFs decreased by less than 4% during a 36% price drawdown, indicating investor resilience [3] Group 4: ETF Holdings and Market Dynamics - Data indicates that U.S. ETFs held 1.37 million BTC at the peak in October and still hold around 1.32 million as of December 19, suggesting that the majority of the sell-off did not originate from ETF holders [4] - BlackRock's iShares Bitcoin Trust (IBIT) has increased its market share to nearly 60%, managing approximately 780,000 BTC during this correction [4]