Bitcoin's performance as a hedge against currency debasement has faltered, with its price action lagging while gold and silver reach new record highs, according to recent analysis. The latest insights from Karel Mercx, an investment specialist with Beleggers Belangen, indicate that Bitcoin has not succeeded in becoming the investors' preferred choice for the debasement trade. This comes as gold and silver continue to climb, leaving Bitcoin at a disadvantage.
Currently, Bitcoin has fallen below the 20-ounce mark in gold terms as it enters 2026, nearing its lowest levels in two years, based on data from TradingView. The precious metals market is reacting positively to US government measures against Federal Reserve Chair Jerome Powell, in contrast to Bitcoin, which struggles to find its footing.
Mercx shared his views on social media, emphasizing that the debasement trade has favored precious metals over Bitcoin. "The verdict is clear: Gold and Silver are leading the debasement trade, not Bitcoin," he stated. "As metals reach new all-time highs, Bitcoin remains 20% below its previous peak," he added.
The assertion challenges the notion that Bitcoin could serve as a robust alternative to traditional hard money. Despite Bitcoin's reputation as "digital gold," actual investment trends show a continued preference for tangible assets like gold. "The narrative has changed," Mercx remarked. "Investors are opting for the tried-and-true hard money over digital options."
Within the crypto community, concerns are growing about Bitcoin's ability to rebound. Crypto trader and analyst Michaël van de Poppe noted the importance of acceleration in Bitcoin's price movements to avoid further declines. "Gold and silver have set all-time highs, and Bitcoin must capitalize on this breakout to prevent a downturn," he commented.
Meanwhile, market analyst Benjamin Cowen highlighted the significance of gold's performance relative to the S&P 500, suggesting a potential shift in market dynamics that could alter trends established over the past decade. "If the S&P 500 continues to lose ground against gold, the market environment may fundamentally change," he noted.
The conversation around Bitcoin's diminishing four-year price cycle continues, with Mercx previously declaring it "dead" in 2025, contributing to a growing narrative of Bitcoin's weakening performance cycle. "Bitcoin priced in gold shows each cycle weaker than the last," he observed, pointing to the first four-year loss in its history.