This wave of gold market activity remains hot, and the impact on the cryptocurrency market is really beginning to show. The overall pattern is that mainstream coins are under pressure, with severe differentiation across different categories.

To be honest, gold has a millennia-long consensus backing, central bank endorsements, and real gold and silver support. Currently, with geopolitical turmoil and the US dollar weakening, gold is continuously attracting capital. This directly undermines the narrative of Bitcoin as "digital gold." A large amount of funds that originally sought refuge are now turning directly to gold ETFs and physical gold, which are less volatile assets, resulting in a very obvious diversion effect. The most direct manifestation is the ratio of Bitcoin to gold, which recently fell to 19, hitting a new low since November 2023. Capital is flowing toward gold, while the added support for cryptocurrencies is clearly insufficient.

What’s more complicated is that rising gold prices usually indicate a cooling of market risk sentiment, coupled with expectations of tightening liquidity. This is a double blow for highly volatile virtual currencies. Look, between October and December 2025, when gold experienced two single-day crashes of over 4%, Bitcoin was also simultaneously hammered down. This shows that the risk transmission chain between the two assets is particularly tight. Now, with gold prices hitting new highs, virtual currencies could be hammered down at any moment due to rising risk aversion, with leveraged positions more easily liquidated together, greatly amplifying volatility risks.

From a monetary policy perspective, there is a clear disconnect here. The expectation of Fed rate cuts is indeed pushing up gold prices, but Bitcoin’s key support actually comes from risk appetite and new capital inflows. Even if rate cuts actually occur, as long as risk aversion persists in the market, virtual currencies will find it hard to truly benefit. Additionally, the devaluation of the US dollar is theoretically a plus for dollar-denominated assets, but this benefit is completely offset by investors’ preference for gold, which puts virtual currencies under further pressure.

Behind this is the truth of market segmentation—traditional safe-haven assets are regaining their voice.