Bitcoin-to-Gold Ratio Hits New Low as Analysts See Rare Investment Opportunity

Bitcoin's relative value against gold has reached a new low, with the BTC/gold ratio falling to 18.5 ounces per BTC as of early January 2026. This marks the weakest level since November 2023, reflecting gold's record-breaking rally and Bitcoin's inability to sustain gains above $90,000 according to analysis. Analysts are closely monitoring this dynamic, noting that such extreme valuation readings have historically preceded significant Bitcoin price recoveries.

The Bitcoin-to-gold ratio is calculated by dividing the price of one Bitcoin by the price of an ounce of gold. As of January 20, 2026, gold was trading near $4,888 per ounce, while Bitcoin struggled to maintain support above $90,000 as reported. This divergence has led to speculation about whether Bitcoin is entering a period of capitulation or if it could soon reverse course.

Key technical indicators, such as the Z-score for the BTC/gold ratio, have crossed below -2, signaling a historically significant undervaluation of Bitcoin relative to gold. Similar readings in 2022 and 2020 were followed by sharp Bitcoin rallies, with the 2022 signal leading to a 150% price increase within a year.

Why Did This Happen?

Gold's strength has been attributed to broader structural shifts in the global monetary system, with investors increasingly favoring hard assets over traditional financial instruments according to analysis. Factors such as the US dollar's weakening position and evolving geopolitical risk have pushed capital into gold as a safer store of value. Bitcoin, meanwhile, has lagged behind in attracting significant inflows, with analysts suggesting that its perceived higher risk has limited its appeal relative to gold in this environment.

Capriole Investments founder Charles Edwards has highlighted that gold's historical bull markets have averaged over 150% gains over 100 years. If this pattern holds, gold could trade as high as $12,000 in three to ten years, further extending the pressure on the BTC/gold ratio. This has raised questions about whether Bitcoin can maintain its narrative as a digital store of value in the current market context.

How Did Markets React?

Despite Bitcoin's undervaluation, institutional demand has shown signs of cooling. Spot Bitcoin ETFs recorded an outflow of $483.38 million on January 21, 2026, following a $394.68 million outflow the previous week according to data. This contrasts with gold's strong performance, which has reached all-time highs as investors continue to allocate capital to physical commodities amid geopolitical uncertainty.

Bitcoin's struggles have also coincided with a broader risk-off market sentiment. Japanese bond yields climbed to levels not seen since 1999, triggering a sell-off in risk assets and a shift toward safe havens. Bitcoin's price behavior has mirrored that of high-beta assets, making it more sensitive to global macroeconomic shifts than to its intrinsic supply-side dynamics.

What Are Analysts Watching Next?

Analysts are focusing on the potential for a capital rotation from gold back into Bitcoin as market conditions evolve. Bitwise European head of research André Dragosch has noted that gold typically attracts capital first, with Bitcoin following as the perceived risk profile stabilizes according to analysis. He argues that the current undervaluation of Bitcoin represents a rare asymmetric setup, where the potential upside significantly outweighs the downside.

Technical analysis also suggests that the BTC/gold ratio may be entering the final stage of a downtrend. Decode, a crypto analyst using Elliott wave theory, has identified the ratio as being in the fifth wave of a corrective C-wave according to research. This structure typically signals that a bearish phase is nearing completion, even if investor sentiment remains negative.

The Z-score for the BTC/gold ratio has dropped below -2, reinforcing the idea that Bitcoin is currently undervalued. Historical data shows that this level often precedes a mean reversion in Bitcoin's favor, with BTC outperforming gold for months or even years afterward. The last such event in late 2022 led to a 150% price increase within a year, raising expectations for a potential rebound in 2026.

Bitcoin's future performance will depend on a variety of factors, including macroeconomic shifts, regulatory developments, and institutional adoption. With the recent halving event in 2024 and the increasing availability of regulated Bitcoin ETFs, the conditions are in place for a potential reacceleration in Bitcoin's price trajectory. However, external shocks such as geopolitical tensions or regulatory tightening could delay or dampen this expected trend.