Why Bitcoin and Ethereum Are Rising as Gold Loses Steam in 2025

On October 22, 2025, Bitcoin (BTC) and Ethereum (ETH) are gaining momentum, with BTC up 1.2% to $108,500 and ETH up 4.17% to $4,060, while gold suffered a historic 6% single-day drop from its $4,381 peak, erasing $2.1 trillion in market cap. This divergence, amid U.S.-China trade tensions and inflation fears, suggests a capital rotation from traditional safe-havens to cryptocurrencies, as institutional investors view BTC and ETH as “digital gold” in decentralized finance (DeFi)'s $150 billion+ TVL ecosystem. Analysts from Swissblock and Ash Crypto highlight this shift, noting similar patterns earlier in 2025 when BTC rallied post-gold corrections, signaling a new dynamic in asset allocation.

Bitcoin’s Surge: Institutional Inflows and Scarcity

BTC’s rise is fueled by $477 million in spot ETF inflows on October 21, ending four days of outflows, per Farside data. Institutional optimism, with 67% bullish per Coinbase’s report, sees BTC’s 21 million fixed supply as a hedge against inflation, unlike gold’s physical constraints. The MVRV Z-Score rebound to 1.96 and 99.6% drop in long-term holder sales indicate selling exhaustion, supporting $108,000. A breakout above $111,500 could target $116,000, with year-end forecasts at $130K-$200K, per JPMorgan.

Ethereum’s Momentum: DeFi and Layer-2 Upgrades

ETH’s strength stems from $141.6 million ETF inflows and the upcoming Fusaka upgrade, slashing layer-2 fees by 8x. With $40 billion TVL, ETH powers DeFi lending and RWAs, attracting whale accumulation (20,000 ETH). Holding $3,974 support, ETH eyes $4,500-$6,000 by December, per Changelly. Gold’s drop, as Peter Brandt noted, highlights BTC/ETH’s portability and divisibility.

2025 Outlook: Crypto as the New Safe-Haven

Gold’s correction, driven by profit-taking, contrasts crypto’s institutional embrace, with $50 billion ETF inflows YTD. As DeFi integrates tokenized assets, BTC and ETH could capture 10% of gold’s $15 trillion cap by 2026, per VanEck.

In summary, BTC and ETH rise as gold falters, driven by institutional flows and DeFi’s digital advantage in 2025.