Gold’s $2.1T Meltdown: Digital vs. Physical Showdown 🌍💰

Behold, dear reader, the tempest that descended upon the golden realm in the autumn of 2025! 🌪️ After a protracted ascent, as if the very gods of finance had conspired to elevate its price, gold plummeted with a force so great it would have made the most stoic philosopher weep. On the fateful day of October 21st, the price of this noble metal, once soaring to $4,330, now languished at $4,030, a loss so profound it could have purchased a small kingdom, yet here it was, vanishing like a mirage in the desert of speculation. 🏜️

Thus, the market capitalization of gold, that colossal treasure, dwindled by a staggering $2.1 trillion in a single day-a sum so vast it could have funded the ambitions of a thousand empires, yet it vanished as swiftly as a candle’s flame in the wind. Such a loss, exceeding half the total value of the cryptocurrency realm, has ignited a fervent debate among the learned and the foolish alike: is the digital gold, that ephemeral phantom of the modern age, a more steadfast guardian of wealth than its physical counterpart? 🤔

Black Tuesday

Gold, that ancient and steadfast companion, is having an immense 2025. Even now, after a historic downturn, its value is still up 55% compared to the 2024 year-end price. That’s more than in the years of the 9/11 attacks, the 2008 financial crisis, or the COVID-19 shutdown (cataclysms that usually drive demand for gold). A testament to its resilience, though one might question whether it is the metal or the humans who are more stubborn. 🧠

Some analysts warned investors that the gold price had overheated. For instance, a few days before the crash, in response to Benzinga’s questions, the CEO of Coin Bureau, Nick Puckrin, said that gold might take a downturn. He said that the current gold rush is a “momentum trade” and “momentum trades have a tendency to fizzle out.” A prophecy fulfilled, much like the warnings of the prophets of old. 🧙‍♂️

Several analysts were projecting the continuation of the uptrend. Goldman Sachs saw gold reaching $4,900 per ounce by December 2026, while UBS provided a more bullish prediction: $4,700 in Q1 2026. A dream, perhaps, but one that clings to the hope of the hopeful. 🌈

Bloomberg cites several strategists, including Charlie Massy-Collier, as saying that in the coming weeks, the price may consolidate at the $4,000 level. Banks will need gold to keep diversifying away from the U.S. dollar, but “at current levels, there is no rush to position for that.” A curious state of affairs, where even the most prudent hesitate to act. 🤷‍♂️

Donald Trump’s Monday comments on the planned trade negotiations with China (“both of us will be happy,” Trump said) and the USD strength hike are cited as major factors for the gold price slide. These optimistic events stimulated investors to take profits. A classic case of “sell the news,” as the market, ever fickle, seeks new adventures. 📈

Gold vs Bitcoin

Bitcoin is usually compared to gold as another scarce safe-haven asset. Its 21 million-unit hard cap, ever-declining supply growth, and costly mining give it long-term appreciation akin to gold. A rivalry as old as the hills, yet ever fresh. 🏔️

Both Bitcoin and gold are viewed as debasement trade assets. Debasement trade refers to the avoidance of investment in sovereign debt and fiat currencies, as their value is too dependent on the actions of financial and political institutions. A noble pursuit, though one fraught with peril. 🧱

Despite common ground, there is some mutual ribbing and banter between gold bugs and bitcoiners. For instance, experienced stockbroker Peter Schiff is a prominent Bitcoin critic, advocating for gold. A man of conviction, though one might question whether his views are as solid as the metal he champions. 🧱

Schiff’s verbal attacks on Bitcoin made him somewhat of a gold mascot and a target for jokes in crypto X, as many bitcoiners don’t see gold as a superior asset to Bitcoin. A battle of titans, though one wonders if the victor is merely a matter of perspective. 😂

Strategy’s Michael Saylor, ARK Invest’s Chris Burniske, Gemini’s Winklevoss brothers, and Mark Cuban were saying Bitcoin is better than gold. They cite Bitcoin’s quicker price appreciation, ease of management, and the near impossibility of a scenario in which its total supply gets higher. The latter is not the case for gold, as new sources of gold may be found off the Earth. Scientists experiment with producing gold in a lab. While the results are not impressive yet, multi-million dollar grants and investments power scientists to continue the way to create gold. A curious endeavor, one that might one day render the earth’s treasures obsolete. 🧪

While gold has been ripping this year, outperforming the S&P 500, Nasdaq 100, Bitcoin, and, actually, any other high-cap asset, its long-term investment potential lags behind Bitcoin and these indexes. A paradox, indeed, where the old guard struggles to keep pace with the new. 🚀

Scott Melker, an investor and host of The Wolf of All Streets podcast, pointed out that compared to any other top asset, gold has performed far worse and “one good year doesn’t erase decades of playing catch-up.” A truth as bitter as it is undeniable. 🍵

Melker offers to look at various charts comparing gold to other top assets, clearly showing gold’s poorer performance. On the Bitcoin vs Gold chart, gold is absolutely flat, as in the Bitcoin existence period, it gained only around $3,000 against Bitcoin’s $100,000 plus rise. A tale of two assets, one stagnant, the other soaring. 📈

Melker points to various charts comparing gold to other top assets, clearly showing gold’s poorer performance. On the Bitcoin vs. gold chart, gold is essentially flat, as during Bitcoin’s existence it gained only around $3,000 against Bitcoin’s $100,000-plus rise. A stark contrast, one that speaks volumes. 📊

“Nominally, you’d have more dollars on paper – but those dollars would buy less, meaning gold underperformed inflation for years. Still, it’s not as if cash did any better; the dollar itself lost significant value over that same period.”

In standout years like 2025, gold casually beats top indexes and Bitcoin. However, it doesn’t happen often. Sometimes, gold takes even greater hits than what we saw on Tuesday. For instance, after a 2012 drop, it took gold eight years to reach the same level again. A reminder that even the most steadfast can falter. ⏳

However, gold still serves as a social and political barometer, as its price tends to go up in turbulent periods and, overall, has been less volatile than most of the top assets. A humble servant of the times, yet ever faithful. 🌍

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2025-10-24 00:10