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Bitcoin vs Gold: XAU outperforms BTC in Q3

• Gold price soared to a new all-time high of $3,895 on Wednesday, returning a positive Q3 of over 16%.
• Bitcoin consolidated in Q3, recording modest gains of 5.63% after reaching its mid-August all-time high of $124,474.
• FXStreet interviews several experts to get their views on Bitcoin and Gold in the current market conditions.

Gold (XAU) outperformed Bitcoin (BTC) in the third quarter (Q3), rallying to a record high and closing Q3 with double-digit gains. Meanwhile, BTC delivered only modest returns after its mid-August peak, setting the stage for a closely watched Q4. To gain more insights into Gold and Bitcoin, FXStreet interviewed some experts in the crypto markets.

Performance of Bitcoin and Gold in Q3

Gold posted a performance in the third quarter (Q3), hitting a new all-time high of $3,895 on Wednesday after months of steady accumulation. By late Q3, the yellow metal had risen 47% year-to-date, significantly outperforming the S&P 500, as US Dollar (USD) weakness, geopolitical risks, global uncertainty, and new US trade barriers fueled demand.

Meanwhile, Bitcoin consolidated in Q3, recording modest gains of 5.63% after reaching its mid-August all-time high of $124,474, but it lagged behind equities and Gold as leverage liquidations and macroeconomic pressure weighed on performance.

What drives Gold prices to record highs?

The surge in the yellow metal price in Q3 has many reasons, as follows:

Central banks and emerging markets: Gold demand rises

Central bank demand for Gold has continued to stay elevated despite reserves rising, with a 2025 World Gold Council survey of central bank managers showing the highest-ever proportions expecting both their own institution (43%) as well as global central banks collectively (95%) to increase their Gold reserves over the next 12 months. The USD’s share of central bank reserves are falling, while the Gold share is constantly rising as shown below.

Geopolitical and trade uncertainty

Rising trade uncertainty and geopolitical conflicts have supported the price of the yellow metal, fueling risk-off sentiment in the market. US President Donald Trump’s 90-day tariff pause came to an end in mid-August, reigniting the trade tensions between the world’s two biggest economies, the US and China.

Moreover, China has been gradually positioning the Yuan and Gold as alternatives to the US Dollar. Reports suggest Beijing encourages trade partners to convert surpluses into Gold stored in Shanghai. If even 80% of China’s trade surplus were converted, it could require 15–20% of annual global Gold output — creating a powerful tailwind for prices. The bigger the surplus, the stronger the demand, and the higher the support for Gold.

Additionally, the ongoing conflict in the Middle East between Israeli and Hamas, created a persistent undercurrent of global uncertainty throughout Q3. Adding to this, the Russia-Ukraine conflict also contributed to risk-off sentiment, with investors pouring billions into safe-haven assets, such as Gold. These ongoing uncertainties have caused the USD to weaken, reaching multi-month lows amid rising geopolitical and economic risks.

Fed interest rate cut

On the macroeconomic front, the Federal Reserve (Fed) adopted a “wait-and-see” approach to interest rate cuts throughout the year despite constant pressure from President Trump.

Fed Chair at the speech in late August, highlighted that the central bank will adopt a new policy framework of flexible inflation targeting and eliminate the ‘makeup’ strategy for inflation.

“Framework calls for a balanced approach when the central bank’s goals are in tension,” Powell added.

In mid-September, the FOMC reduced the fed funds rate by 25 basis points to a range of 4.00%–4.25%, marking the first rate cut since December 2024. The updated dot plot projected two additional 25 bps cuts by December 2025, bringing rates down to 3.50%–3.75%, with further easing to 3.25%–3.50% by the end of 2026.

This dovish stance departed from the Fed’s earlier wait-and-see stance, reflecting concerns that tariffs were pressuring goods prices without derailing the broader disinflation trend. Political undercurrents, including Trump’s calls for sharper cuts, added noise, but Powell reaffirmed the Fed’s independence, helping drive safe-haven assets like Gold to new highs.

Bitcoin: Consolidation and Macro Pressure

Bitcoin price hit a new all-time high of $124,447 in mid-August before retracing to July’s lows of $107,000. Unlike the Gold rally in Q3, the Bitcoin price has been consolidating between $107,000 and $120,000 and the reasons are explained below.

Massive long liquidations

During mid-September, the crypto market experienced the largest single-day liquidation of the year, with $1.65 billion in long positions wiped out, compared to just $145.83 million in shorts, highlighting excessive bullishness among traders.

Despite the liquidations, CryptoQuant’s BTC Estimated Leverage Ratio (ELR) stood at 0.26 on Thursday, close to its yearly peak of 0.291 recorded on September 11, yet still well below the record high of 0.358 in 2011, suggesting that traders remain moderately leveraged but not excessively overexposed.

Macro economic headwinds

Macroeconomic headwinds have kept Bitcoin trading in a consolidating range between $107,000 and $120,000. Trade tariff uncertainty fueled risk-off sentiment, while the Fed’s September rate cut turned into a sell-the-news event, dragging BTC back toward its July low of $107,000.

In addition, weakened amid escalating global conflicts, including tensions between Iran and Hamas and the ongoing Russia-Ukraine war, prompting investors to shift toward safe-haven assets like Gold.

Institutional inflows

On the institutional side, Bitcoin spot ETFs recorded net inflows of $8.79 billion in Q3, a positive result, although lower than the $12.8 billion seen in Q2.

As seen in the monthly flows chart below, July saw $6.02 billion in inflows as Bitcoin rallied toward $120,000 and reached a new ATH of $124,447 in mid-August. However, flows turned negative in August, with $751.12 million in outflows dragging BTC down to a low of $107,000. In September, inflows rebounded to $3.53 billion, supporting a recovery and keeping BTC range-bound between $107,000 and $120,000 throughout Q3.

Major drawdowns in Bitcoin treasury companies

CryptoQuant highlighted that Bitcoin treasury companies that raised capital via Private Investment in Public Equity (PIPE) have experienced significant drawdowns, with share prices often reverting to their PIPE issuance levels.

As shown in the chart below, Kindly MD (NAKA), whose stock price skyrocketed from $1.88 at the end of April before the PIPE announcement, to an intraday high of $34.77, an 18.5x increase in less than a month. However, the stock has declined by 97% since then, reaching a low of $1.16, which is essentially the same as its $1.12 PIPE price.

The report also noted that other Bitcoin treasury companies, including Strive (ASST), Empery Digital (EMPD), and Sequans Communications (SQNS), appear to be following a similar path.

If this trend continues, fewer companies will have PIPE deals, which would affect the wider adoption of BTC and could weigh on broader BTC investor sentiment.

Corporate demand weakens

On the corporate side, the total amount of Bitcoin purchased by corporate companies declined significantly. In August, Strategy acquired 3,700 BTC, while other treasury companies purchased 14,800 BTC. This is significantly lower than the 134,000 Bitcoins purchased by Strategy in November 2024 and the 66,000 Bitcoin purchased by other companies in June 2025, their respective record-high purchases. August purchases also fell below the 2025 monthly averages, 26,000 BTC for Strategy and 24,000 BTC for other firms.

Moreover, treasury companies are purchasing less Bitcoin per transaction. In August, Strategy’s average purchase size fell to 1,200 BTC, the lowest in a year, compared with a 2025 peak of 14,000 BTC and an all-time high of 45,000 BTC in November 2024. Meanwhile, the other Bitcoin treasury companies purchased 343 Bitcoin on average per transaction, down 86% from their 2025 highs of 2,400 Bitcoin reached in March.

Correlation between Bitcoin and Gold

Bitcoin and Gold, often compared as alternative stores of value, exhibited a near-zero correlation in Q3 2025, making them complementary portfolio assets. In Q3, Gold surged as the USD weakened, while Bitcoin dipped amid equity volatility, highlighting divergent drivers.

However, Bitcoin’s correlation with the S&P 500 is positive, and its 30-day correlation often exceeds 70%. This suggests a close relationship between Bitcoin and traditional equity markets, particularly during periods of heightened market stress or macroeconomic uncertainty.

Moreover, the Deutsche Bank Research Institute highlighted that Bitcoin has a low correlation with other asset classes, suggesting it can provide diversification benefits. A 2023 Fed study revealed that Bitcoin’s price is unrelated to all types of macroeconomic shifts except those related to inflation.

The analyst reported, “The case for Bitcoin as a reserve asset may be stronger for emerging markets, as studies show that Bitcoin can help holders circumvent capital controls in countries such as Argentina, Egypt and Nigeria. Bitcoin is increasingly seen as a workable alternative to relatively unstable local currencies.”

What’s next in Q4?

Gold could continue setting new record highs in Q4 if robust central bank demand and sustained ETF inflows persist. Rising geopolitical tensions and a weakening US Dollar are likely to provide further support. At the same time, expectations of two additional Fed rate cuts by year-end could trigger even more upside for the yellow metal.

However, Mike McGlone, Bloomberg Intelligence’s Senior Commodity Strategist, posted on X some signs of concern for Gold in Q4.

McGlone stated that Gold signals risk of a significant stock reversion that may drag it down, with a swing of about 5% up or 8% down from $3,800 an ounce that would put Gold at either the $4,000 mark or back to April’s $3,500 high. Both are possible in Q4, whether stock market volatility spikes or stays muted. In the former case, US treasuries could emerge as the top beneficiary, as in 2008.