Bitcoin and Gold: Does October’s nearly zero correlation dismantle the ‘digital gold’ notion?

Throughout October, Bitcoin and gold have presented two distinct narratives that did not align with traders’ expectations.

For the majority of the month, Bitcoin and gold appeared to operate in separate markets. Gold consistently rose, gaining approximately 10% over the past month, while Bitcoin experienced a decline of around 6%.

This divergence is noteworthy on its own, but the timing is even more significant, as the perception people had does not match the actual events.

Graph illustrating the 30-day performance of Bitcoin and gold on Oct. 22, 2025 (Source: TradingView)

The common narrative suggests that gold dropped while Bitcoin saw a rebound, illustrating a classic “risk-on versus safe haven” transition. However, the data does not support this view. Gold’s notable decline did not occur until October 21 to October 22, when it plummeted over 5% in a single day.

Bitcoin did not rise during that period of weakness and instead fell approximately 1.5% within the same timeframe. The day Bitcoin truly recovered from its weekend losses was the day prior, when gold was still on an upward trajectory.

This sequence of events alters the correlation narrative. Rather than Bitcoin rising as investors moved away from metals, both assets moved together on October 20 and most of October 21. The subsequent drop in gold was an isolated movement in metals: a clear departure from Bitcoin’s timeline, not an inverse relationship.

Nonetheless, Bitcoin did experience a brief rally towards the end of October 21, climbing 5% to $114,000 while gold continued to decline. Unfortunately, this rally was short-lived, as Bitcoin returned to $108,000 within 12 hours as gold continued its downward trend.

Bitcoin vs gold (Source: TradingView)

This is crucial for anyone still viewing Bitcoin and gold as opposing ends of the same inflation hedge.

Over the past month, they have behaved like entirely different entities: gold responding to interest rates and liquidity, while Bitcoin reacted to positioning and leverage. A closer examination of the on-chain data and derivatives flow reveals that Bitcoin had already reached its short-term stress point by mid-October, having briefly lost 17% from its recent high.

Gold’s challenges emerged five days later, as traders began to reduce positions built during the earlier rally.

This delay accounts for the minimal correlation metrics for the month, which registered a mere 0.1 between Bitcoin and gold. The low correlation indicates a temporal misalignment: the assets reacted to distinct shocks separated by several trading days.

Structurally, there was nothing amiss in gold’s crypto counterpart either. The Bybit XAUTUSDT perpetual contract, a 24/7 gold contract priced in USDT, tracked the actual spot price almost flawlessly. There was no significant basis drift, no funding squeeze, and no liquidity gap.

The movement was simply about the broader gold market taking a breather after a relentless surge. This close correlation also demonstrates how seamlessly tokenized commodity exposure now operates within crypto frameworks.

If you are managing collateral or hedging within the ecosystem, these perpetual contracts provide continuous coverage without the complications of futures expiration cycles.

Graph depicting the performance of the XAUUSDT perpetual contract from Sep. 23 to Oct. 22, 2025 (Source: TradingView)

For its part, Bitcoin behaved as one would expect from a higher-volatility asset: it moved more rapidly, hit its lows earlier, and found stability while gold was still reaching its peak. By the time gold began to decline, Bitcoin had already tested its support and stabilized above six figures. Its beta relative to gold (indicating how much it moves in relation to gold) was about 0.15, suggesting a very weak connection.

This divergence is what makes the situation intriguing. Despite the frequent references to “digital gold,” the two assets often operate on different timelines. Gold trades in macro time, responding to central bank actions and liquidity movements.

In contrast, Bitcoin trades in positioning time, where leverage, ETF flows, and on-chain distribution influence short-term volatility. The moments when both assets respond to the same liquidity impulse are less common than most investors assume.

This month served as a reminder that correlation is dependent on the perspective employed. Over a single day, they may appear disconnected. Over a quarter, the shared inflation narrative might re-emerge. However, the split in October illustrates how easily that narrative can fracture when one asset is influenced by traditional funding markets and the other by crypto-native leverage.

The clearest takeaway? Bitcoin experienced its crash first, followed by gold. The connection was chronological. In a market where traders are still searching for macro symmetry, sometimes the wisest strategy is simply to recognize when two assets cease to share the same timeline.

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