Bitcoin (BTC) looks like the underdog against gold as the precious metals hit new all-time highs on Monday.
Key points:
Bitcoin is not a downgrade trade after years of losses against gold, analysis concludes.
As precious metals reach all-time highs, BTC price action fails to recover.
Gold begins to interrogate the S&P 500, which could change a years-old narrative if it continues to gain.
BTC Downgrade Trade: “The Narrative is Broken”
A new analysis by Karel Mercx, an investment specialist at Dutch investment advisory Beleggers Belangen, says Bitcoin has failed as a “debasement trade.”
Bitcoin fell below 20 ounces in gold terms in early 2026, and is now hovering around two-year lows, according to data from TradingView.
As markets react to the US government’s action against Federal Reserve Chairman Jerome Powell, gold and silver continue to enjoy price discovery while Bitcoin falters.
While bulls hope BTC/USD will soon catch up, for Mercx, the writing has long been on the wall.
“The verdict is: downgrade trading is gold and silver, not Bitcoin,” he told his X followers in a post on Monday.
“A frontal attack on the FED sends metals to new ATHs, while BTC is 20% below its peak.”
Mercx took issue with the idea that Bitcoin is an attractive destination for investors seeking refuge from the dilution of fiat currency supply, also known as the “debasement trade.”
Even though Bitcoin is compared to “digital gold” against bullion, actual capital flows point to demand for the latter.
“The narrative is broken,” he continued.
“Investors are choosing the original hard money over the digital experiment. Book closed.”
Bitcoin Price Cycle Obituaries Increase
Among cryptocurrency advocates, a sense of urgency continues to grow.
Related: Fed Rate Cuts Under Fire: 5 Things to Know About Bitcoin This Week
Addressing the topic, cryptocurrency trader, analyst and entrepreneur Michaël van de Poppe acknowledged that time may be running out for a market rally.
Times are starting to get interesting for anyone involved in the #Crypto markets.
Gold has reached a new all-time high.
Silver has reached a new all-time high.My concern: it really needs to accelerate with this breakout, or we will start falling again, and the downtrend… pic.twitter.com/55VsW2UyuT
—Michaël van de Poppe (@CryptoMichNL) January 12, 2026
As for stocks, cryptocurrency market commentator Benjamin Cowen called gold’s performance against the S&P 500 “one of the most important charts right now.”
“If the SPX crashes against gold, the environment we have found ourselves in for the last decade will completely change,” he argued on the monthly chart.
Meanwhile, last September, Mercx declared Bitcoin’s four-year price cycle “dead,” a narrative that has continued to gain popularity ever since.
“$BTC price in gold shows each cycle weaker than the last, and now the first loss in 4 years,” he wrote at the time.
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