Gold Falls to Longest Streak Since 1920

Lead paragraph

Gold has recorded its most prolonged run of declines since 1920, a development that crystallized public and institutional attention on March 25, 2026 when Coindesk published that the decline represented the worst streak in more than a century. The report also highlighted that the bitcoin-to-gold ratio has climbed roughly 30% since the outbreak of the Middle East conflict on Oct 7, 2023, underscoring a relative reallocation of risk and safe-haven capital. For investors who treat gold as a ballast or inflation hedge, the conjunction of a historic drawdown and a resurgent bitcoin has raised fresh questions about correlation dynamics across asset classes. This piece dissects the data, reviews drivers across macro and market-structure vectors, and frames potential implications for portfolio construction — without issuing investment advice.

Context

Gold's latest stretch of underperformance is notable not only for its historical rarity but for the market context in which it has arrived. According to Coindesk (Mar 25, 2026), the streak is the longest since 1920, a period that encompassed very different monetary and geopolitical regimes; the comparison serves to underline the unusual nature of the current price move rather than to imply an identical causal mechanism. Over recent quarters, investors have contended with a mix of elevated real yields, dollar strength in episodic windows and shifting geopolitics — all factors that can undermine gold's traditional safe-haven premium.

This episode is also distinguished by a contemporaneous rally in bitcoin. Coindesk's March 25, 2026 coverage cites the BTC/gold ratio rising approximately 30% since Oct 7, 2023, the date widely referenced as the start of the recent Middle East conflict. That ratio move is a direct, measurable indicator of capital rotating toward crypto relative to the yellow metal. For institutional players evaluating cross-asset hedges, the divergence between a century-era signal in gold and a marked outperformance in bitcoin is prompting reviews of correlation assumptions and stress-test scenarios.

Historically, gold has tended to outperform during episodes of acute geopolitical risk and persistent inflationary pressure, while bitcoin's role has been more contested and time-varying. The present episode tests both narratives: geopolitical anxieties have not preserved gold's advance, while bitcoin has benefited from renewed risk-on flows and narrative momentum around digital-asset adoption. Institutional desks that model portfolio convexity are therefore revisiting parameterizations that tie gold’s efficacy to specific macro regimes rather than assuming a static protective function.

Data Deep Dive

The primary anchor points for this analysis are explicit: Coindesk's Mar 25, 2026 report, the Oct 7, 2023 start-date for the regional conflict used in the BTC/gold ratio calculation, and the historical comparator year 1920. Those three datapoints — 30% ratio change, Oct 7, 2023, and 1920 — are used here as touchstones. Beyond that, market microstructure metrics provide further context: realized volatility, rolling 30-day correlation between gold and bitcoin, and flows into exchange-traded products are the key variables institutional investors are monitoring. While public proprietary flow tallies vary, multiple independent trackers have pointed to meaningful rotation into crypto-focused funds in the past six months, consistent with the ratio move highlighted by Coindesk.

Quantitatively, the BTC/gold ratio up ~30% signals a substantive relative performance gap. For a stylized example, if an investor had split nominal exposure evenly between gold and bitcoin at the Oct 7, 2023 date, the portfolio would now show a material tilt toward crypto returns versus the same weighting in gold alone. That kind of relative drift matters for risk budgeting: volatility-scaled allocations can shift materially even absent changes to individual asset volatilities. Portfolio committees should therefore review rebalancing thresholds and how often they rebalance across assets with asymmetric liquidity profiles.

It is also instructive to compare this episode to previous stress periods. In 2008–2009, gold decoupled from equities and served as a haven; in the post-2019 monetary-expansion era, gold benefitted from prolonged real-rate compression. The current context — where elevated nominal yields and episodic dollar strength co-exist with geopolitical risk — is closer to a complex, mixed regime. The 1920 comparator is a reminder that structural macro regimes can flip the traditionally observed relationships; practitioners should not extrapolate a single historical model indiscriminately.

Sector Implications

For bullion markets, the streak raises questions about inventory management, central bank behaviour and ETF flows. Central bank demand has historically been a stabilizing force, and while many central banks remain net buyers, transactional cadence and reserve diversification policies are not static. If institutional holders reduce marginal demand or if large holders trim positions to meet liquidity needs, price pressure can be exacerbated. For the miners, sustained price weakness could compress margins and influence capex decisions — but miners have also used hedging programs and balance-sheet adjustments since the 2010s to dampen cyclical exposure.

On the crypto side, bitcoin's relative strength is influencing product innovation and custody conversations. Increased institutional custody adoption, more robust prime-brokerage infrastructure and renewed ETF flows into listed bitcoin products have supported price discovery and reduced some of the counterparty friction that previously deterred larger allocators. The BTC/gold ratio's 30% rise since Oct 7, 2023 is therefore not solely sentiment-driven; it reflects structural improvements in the way institutions access and hold bitcoin-like exposure.

From a cross-asset perspective, real-rate dynamics remain pivotal. If real yields stabilize or compress, the marginal case for gold could reassert itself, narrowing the BTC/gold gap. Conversely, if central-bank credibility remains intact and real yields drift higher, the pressure on gold may persist even if geopolitical risk episodes flare intermittently. The interplay between monetary policy trajectories and geopolitical tail risks will therefore determine whether this episode is a structural reallocation or a tactical divergence.

Risk Assessment

Several risks could reverse or amplify current dynamics. First, liquidity risk: while bitcoin's market depth has improved, it remains vulnerable to episodic liquidity shocks that can produce outsized moves relative to gold's deeper and more broadly held market. Institutions that substitute gold for bitcoin must price in differing liquidity horizons and settlement conventions. Second, regulatory risk: changes in regulatory frameworks for crypto, whether in the U.S., EU or key Asian markets, could materially affect inflows; regulatory tightening would likely compress bitcoin valuations faster than gold.

Third, macro surprises present a bidirectional risk. A sharp pivot to lower real rates would likely restore gold’s appeal; a shock that favors safe, short-duration cash (for example, a sudden fiscal shock to bank balance sheets) could pressure both assets in different ways. Moreover, geopolitical developments could flip investor preferences quickly — a protracted external conflict that threatens energy flows and supply-chains might historically favor physical precious metals as a store of value.

Operational risks are also non-trivial. Custody, counterparty exposure and legal frameworks for crypto differ materially from those that govern bullion and gold ETFs. Institutional risk committees must therefore incorporate legal, custodial and settlement considerations when assessing allocations — quantitative models should be augmented with operational loss scenarios and liquidity-run simulations.

Fazen Capital Perspective

Fazen Capital views the recent split between gold and bitcoin as a regime-testing episode rather than conclusive evidence that gold has lost its role in diversified portfolios. The 30% rise in the BTC/gold ratio since Oct 7, 2023 (Coindesk, Mar 25, 2026) demonstrates capital shifting in the current macro-technological environment, but it does not negate the structural drivers that have supported gold historically, including central-bank reserve mandates and jewelry demand in key markets. A contrarian nuance: the very nature of a century-long comparator (1920) suggests that extreme historical analogues often mask more relevant medium-term drivers such as real yields, liquidity conditions and institutional access.

We also believe the market is pricing a higher risk premium for gold's prospective returns than for crypto, driven in part by clearer narrative momentum around technological adoption in crypto markets and the prospect of further ETF and custody normalizations. That said, crypto's asymmetric regulatory and liquidity risks imply that a one-for-one substitution is not a like-for-like decision. Institutional allocators should therefore treat the current divergence as an opportunity to stress-test correlation assumptions, revise scenario analyses and consider layered exposure strategies that reflect differing liquidity, custody and regulatory profiles. For further Fazen analysis on cross-asset hedges and scenario modelling, see our insights hub and gold-specific research topic.

FAQ

Q: Could gold's historical role as a safe haven return quickly if geopolitical risk intensifies?

A: Yes. Historically, abrupt escalations that threaten trade routes or large-scale commodity supplies have supported gold's safe-haven bid. However, timing and magnitude are uncertain and will depend on whether market participants perceive the event as transient or systemic. The 1920 comparator is instructive but not prescriptive; more relevant are short- and medium-term drivers such as real yields, central-bank messaging and physical demand flows.

Q: Does the BTC/gold ratio's 30% increase mean crypto is a superior hedge?

A: Not necessarily. The 30% ratio move since Oct 7, 2023 (Coindesk, Mar 25, 2026) indicates relative performance but does not capture differing volatility, liquidity, custody and regulatory profiles. A superior hedge is context-dependent: for certain tail-risk scenarios (e.g., fiat collapse), gold's physical properties may outperform; for others (e.g., rapid digital-asset adoption narratives), bitcoin may offer outsized returns but with higher operational risk.

Bottom Line

Gold's longest losing streak since 1920 and a roughly 30% rise in the BTC/gold ratio since Oct 7, 2023 mark a significant divergence that warrants recalibrated correlation and liquidity assumptions across institutional portfolios. Practitioners should use this episode to re-test scenario frameworks and operational readiness rather than to presume a permanent regime shift.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.