Is Digital Gold Dead? Why Eric Balchunas Says Bitcoin’s 2025 Slump is ‘Flawed Logic’

• Robert Petrov
• 13 February, 2026, 12:57
• 354

The numbers tell the story:

• 2025 performance: Bitcoin closed the year down ~6%, while gold delivered a massive 65% gain — its strongest annual return in over a decade.
• The divergence widened significantly after Bitcoin's October 2025 crash, with BTC entering a prolonged bear phase into 2026.
• Longer-term view (since 2012): Bitcoin has outperformed gold in 10 out of 13 years, often by double- or triple-digit margins. It has only underperformed during major bear cycles (2014, 2018, 2022), where gold beat BTC by 50–70%.

Balchunas' point: one-year underperformance does not invalidate a multi-year thesis — especially when Bitcoin's structural advantages (fixed 21 million supply, decentralization, global accessibility) remain intact.

ETF Outflows and Gold ETF Inflows Highlight Divergence

Spot Bitcoin ETF flows turned net negative in November 2025 and have not recovered meaningfully as of February 2026. Billions in outflows during the drawdown compounded BTC's weakness.

In contrast, gold ETFs saw renewed demand:

• Gold ETF inflows reached $10 billion after briefly stalling in December 2025.
• This rotation reflects flight-to-safety flows favoring traditional safe-haven assets during risk-off periods.

BTC/Gold Ratio Approaches Key Support

The BTC/gold ratio — which tracks Bitcoin's performance relative to gold — provides technical context:

• The ratio peaked near 40 ounces of gold per Bitcoin in late 2024.
• It broke below long-term trendline support in October 2025.
• Current level: ~13 — down nearly 70% from the peak, meaning gold has outperformed BTC by that margin since late 2024.
• Historical precedent: During the 2022 bear market, the ratio bottomed near 9 before reversing.
• The 9 level now acts as potential support — a zone where prior cycle reversals began.

A hold or bounce from 9–13 would strengthen the contrarian case for Bitcoin regaining relative strength; a break below 9 would signal deeper structural weakness against gold.

Current Market Snapshot (February 13, 2026)

• Bitcoin: ~$66,000–$67,000 (down ~3% daily, ~12–13% weekly)
• Gold: Continuing its strong run, with spot prices near multi-year highs
• Fear & Greed Index: Remains in extreme fear territory (~5–10)
• ETF flows: Spot Bitcoin ETFs saw modest inflows ($166.5M on Feb 10) but remain net negative over recent weeks

Outlook: Short-Term Pressure vs. Long-Term Thesis

Balchunas' defense holds weight when viewed through a multi-year lens — Bitcoin's outperformance against gold has been consistent outside major bear phases. The 2025 underperformance (gold +65%, BTC -6%) reflects macro-driven risk-off flows, ETF outflows, and deleveraging rather than a fundamental failure of the "digital gold" narrative.

However, near-term risks remain elevated:

• Continued ETF outflows and negative Coinbase Premium signal weak U.S. spot demand.
• The BTC/gold ratio's test of 9–13 support is pivotal — a failure here would extend relative weakness.
• This week's U.S. macro data (jobs report Wednesday, CPI Friday) could either accelerate rate-cut expectations (bullish for BTC) or reinforce hawkish positioning (bearish).

While the single-year comparison may be "absurd" for long-term positioning, it remains painful for holders. The $63,000 cluster (major cost-basis support) and macro catalysts will likely determine whether this is late-stage capitulation or prelude to deeper reset.

For now, the "digital gold" thesis faces short-term pressure — but the longer arc still favors Bitcoin's scarcity narrative over gold's theoretical infinite supply, especially if institutional flows stabilize and macro conditions improve.