Gold hit an all-time high of $5,594.82 per ounce on Jan. 29 before crashing roughly 10% later that day—losing nearly $500 in a matter of hours and wiping trillions off the market. The flash reversal ended a remarkable rally that had pushed the precious metal far beyond most analysts' forecasts.
Cathie Wood Calls Gold 'The Bubble'
Ark Invest CEO Cathie Wood warned on X just before the crash: “Parabolic moves often take asset prices higher than most investors would think possible, but these out-of-the-world spikes tend to occur at the end of a cycle. In our view, the bubble today is not in AI, but in gold. An upturn in the dollar could pop that bubble, a la 1980 to 2000 when gold dropped more than 60%.” Following her comments, gold fell to $5,109.62.
Despite the flash crash, gold is still up nearly 30% year-to-date in 2026. Bitcoin, meanwhile, has moved in the opposite direction. On Jan. 30, the cryptocurrency briefly dropped below $82,000 as geopolitical tensions in the Middle East escalated. Bitcoin is on track to close January in the red, highlighting a sharp decoupling from gold.
Analyst Views: Cyclical Divergence or Structural Shift?
Dessislava Ianeva, an analyst at Nexo Dispatch, argues that monthly snapshots provide an incomplete picture. “Since 2022, Bitcoin has gained about 92% versus gold’s 20%, while its market cap is still only about 10% of gold’s—suggesting massive structural catch-up potential,” she said. However, she acknowledges that since 2025, Bitcoin’s price has become increasingly tied to political events, particularly President Trump’s rhetoric on a “strategic bitcoin reserve” and tariff announcements.
Ianeva sees the current divergence as cyclical, not structural. “Capital rotates toward gold as a familiar hedge amid trade tensions, supported by persistent central bank buying. Bitcoin’s distinct supply dynamics and expanding institutional adoption suggest its long-term case remains intact.” Jonatan Randin, senior market analyst at PrimeXBT, cuts to the chase: “Bitcoin has the downside characteristics of a risk asset—it sells off during geopolitical stress—but it isn’t capturing the same upside driving equities right now. Gold is bought on safe-haven narrative; stocks are bought on AI hype. Bitcoin is caught somewhere in between.”
The short-term capital rotation does not necessarily redefine Bitcoin’s ultimate role. A gold market worth roughly $3 trillion and Bitcoin’s market cap at only 10% of that leave plenty of room for a long-term catch-up. But for now, the so-called “digital gold” is undergoing a real identity crisis.