Gold’s Rally to Set Stage for Liquidity Rotation to Bitcoin – Thesis

• Ash Crypto says gold’s rally added $4.77 trillion in 45 days, nearly 2× Bitcoin’s market cap.
• He argues liquidity could rotate into BTC once gold tops out.
• Fed cuts, dollar weakness, and strong RWA demand continue to favor non-sovereign assets.

Gold broke above $4,000 per ounce this week for the first time in history, extending a 54% year-to-date gain driven by central-bank purchases, ETF inflows, and a weaker dollar, according to Reuters. 

Analysts have linked the metal’s surge to multiple U.S. rate cuts that can happen over the course of  2025 and a flight to safety from political and economic strains in Japan, France, and Washington.

Related: Bitcoin Breaks $126K ATH: What’s Driving the Surge This October

And now, market watcher Ash Crypto wrote on X that gold’s market value “has expanded by about $4.77 trillion in 45 days, almost twice Bitcoin’s capitalization.” That figure has not been independently verified by major commodity sources such as the World Gold Council, but it illustrates how traders perceive the scale of the current liquidity wave.

Fed Cuts Reignite the Liquidity Trade

According to data released following the September Federal Reserve meeting, officials acknowledged growing risks to the labor market and discussed multiple rate cuts this year. 

Futures markets price a 94% chance of a 25-basis-point cut in October and a 79% probability of another in December. These expectations have kept liquidity flowing into hard assets like gold and Bitcoin.

The recent announcement of a ceasefire deal under President Donald Trump’s Gaza peace plan temporarily eased tensions, leading some traders to take profits after gold hit a new all-time high of $4,059.05. 

Ash Crypto: Gold’s Top Could Spark a Bitcoin Surge

Ash Crypto believes that once gold’s rally peaks, liquidity will rotate into Bitcoin, which he calls the next phase of the same macro trade.

“Once gold tops out, we will see liquidity flow into Bitcoin,” he said, adding that BTC’s risk-adjusted upside makes it the logical destination for capital leaving an overbought gold market. “The next Bitcoin pump will melt faces,” Ash noted, adding that the asset’s risk-adjusted appeal makes it the logical destination for capital exiting an overbought gold market.

Macro Setup Favors Bitcoin

Bitcoin currently trades near $122,000, just below its all-time high of $126,000 reached earlier this week.  

As per CryptoQuant, total open interest on Binance recently fell by 7.9% from a record $15.07 billion, indicating some profit-taking and reduced leverage after Bitcoin’s latest rally. 

CryptoQuant data also shows that the Dollar Index (DXY) has traded below its yearly average for 220 consecutive days, during which Bitcoin has climbed from $86,000 to over $125,000. 

The decline in dollar confidence, combined with structural inflation and fiscal imbalances in major economies, continues to push investors toward alternative stores of value.

Related: Corporate Bitcoin Treasuries Climb to $135 Billion with Strategy (MSTR) on Top