I keep thinking about people who have Bitcoin stashed away for the future or a little bit of gold stashed away for the past.
They are usually calm people. They don’t trade headlines, they don’t care about the day-to-day noise, they just want something solid on both sides of the monetary fence. For years, it felt like the smart thing to do, as the long arc of Bitcoin and gold seemed to be a one-way street, with more ounces and fewer regrets over time.
Then January happened.
gold sprint. Bitcoin wasn’t like that.
As gold watchers noted this week, gold was pushed towards record levels, hitting $4,900 an ounce, fueled by the anxiety that tends to emerge when geopolitics gets weird and bond markets start to move as if they have a pulse of their own.
Meanwhile, Bitcoin remained in a narrow range around $89,800.
That gap is everything.
Ratio of seating people
If I were to explain the current difference in one number, it would be BTC priced in gold.
Divide the dollar price of Bitcoin by the dollar price of gold per ounce to find out how many ounces one BTC buys. As gold soars and Bitcoin waits, that number will rapidly decline.
That’s why this chart, the “BTC/gold power law” diagram, is so widespread, and why analysts like Plan C are calling it a historic aberration, hinting at a monstrous mean reversal.
The plain English version of this argument is simple. Those who think in terms of models believe that Bitcoin has a long-term “path” to gold and that the market is wandering far below it. A more technical version is a power law corridor with quantile bands, popularized in various forms by model builders and trackers such as power law dashboards.
Either way, it still delivers the same emotional punch. For many long-term Bitcoin holders, it’s been a while since they’ve seen gold “win” like this.
Why is Gold doing this?
Gold no longer moves like a sleepy hedge. Big banks are treating this move as a positive move.
Goldman Sachs just raised its end-2026 outlook to $5,400 an ounce from $4,900, pointing to a new wave of private demand and steady demand from central banks.
The details are more important than you think. Gold is doing this while real yields remain meaningfully positive. The 10-year TIPS yield was approximately 1.94% as of January 22nd.
This shouldn’t be ideal for a metal that doesn’t bring in profits, yet it continues to do so. When this happens, we usually find that buyers are not price sensitive.
Bitcoin doesn’t require any complicated explanations for now. I was waiting.
Some of that wait shows up in the flow. U.S.-listed spot Bitcoin ETFs saw about $1.1 billion in outflows in the three business days ending January 8, and another $1.5 billion in outflows this week, erasing gains from the start of the year.
This does not mean that the system has “gone away.” This means marginal buyers are fickle, and this market remains more dependent on timing and mood than gold.
So with Bitcoin at $89,873 and gold near $4,900, this ratio looks like a trapdoor opening under the old narrative.
The trade that everyone is quietly modeling
The easiest way to understand the mean reversion setting is to stop thinking in terms of dollars for a moment.
If gold stays around $4,900 and the BTC/gold ratio rises toward the middle of the historical corridor that power law people expect, Bitcoin’s dollar price will almost automatically rise.
Below are the basic “if this, then that” numbers with gold at about $4,900 per ounce.
If this ratio is around 18.5, Bitcoin will remain around $90,000. That is the world we are in today.
If this ratio increases towards 35, Bitcoin will reach around $171,000.
If this ratio reaches 45:60, Bitcoin will reach approximately $220,000 to $294,000.
| Gold price (USD/oz) | BTC/gold ratio (oz/BTC) | BTC Implied Price (USD) | What this scenario means |
|---|---|---|---|
| $4,900 | 18.5 | $90,650 | Currently, BTC remains near current levels |
| $4,900 | 35 | $171,500 | Mean reversion to “mid-band” style level |
| $4,900 | 45 | $220,500 | Stronger snapback, BTC catches up while gold holds |
| $4,900 | 60 | $294,000 | Upper tail movement, “$200,000-$300,000” conversation |
| $5,400 | 35 | $189,000 | Gold rises, ratio normalizes, BTC price rises again |
| $5,400 | 60 | $324,000 | Gold rises, BTC/gold average returns significantly |
Note: The ratio is 1 BTC per ounce of gold, implied BTC price = (gold price per ounce) × (BTC/gold ratio).
When you combine this with Goldman’s gold target of $5,400 by the end of 2026, the calculation gets even bigger, between $189,000 and $324,000, depending on how high this ratio rises.
These numbers don’t predict anything, but they do translate your bet into plain English. The bet is that gold’s strength will make Bitcoin’s underperformance seem “too much” and a snapback could be severe.
What parts model fans don’t want to talk about
Models don’t have to be maps to the future to be useful.
Power law corridors look good on logarithmic charts, and Bitcoin is a good asset for charts. It has been that way for most of my life. That makes the long-term fit easier to look convincing, especially when the question is, “Does it generally rise over time?”
That’s why the real issue here isn’t whether the chart looks good or not. That’s right. The question is, what kind of world are we entering?
As the real yield print shows, gold bids look different if they remain strong alongside positive real yields. Things look different if the big banks continue to raise their targets, as explained in the upgrade story. Things look different when market stress headlines become daily weather.
In that world, Bitcoin could still perform well in dollar terms, but still lag gold for longer than traders would like.
If you want to know which story wins, what to watch next
This will be a story about some simple stories.
- While real yields have held steady, gold has remained near highs, moving away from rapid cooling and leaning towards structural demand. You can track it through the same TIPS series and find gold updates like Mining.com reports.
- Bitcoin ETF flows have stabilized after withdrawals in early January, favoring a rotation back to BTC. The simplest publishing window is the dashboard.
- Bitcoin breaks out of the $89,800 holding pattern as the market is still waiting for a reason to move at the moment.
When people say “Bitcoin is undervalued in terms of gold,” they are actually saying something much softer.
They say they expected Bitcoin to be the winning hard asset of the decade, but now gold is acting as if it wants to take back that crown.
That’s why this feels like a black swan to some. Charts are excuses and emotions are surprises.
- Once the gold rally subsides and Bitcoin wakes up, Bitcoin holders regain their arrogance and gold buyers blink, mean reversion trading will become a story people will be telling for years.
- If gold continues to be on top, this will be a different story and the market will decide that hard money means something that is old, quiet, and easy for financial institutions to hold without a second thought.
In any case, the BTC/gold ratio does the same thing as any good relative indicator. That means we need to stop staring at one price and start thinking about who is winning the “hard asset” battle right now and why.
(Tag translation) Bitcoin
