Bitcoin’s Valuation Lags Gold by 10x But Twice as Scarce: Top Analyst

Bitcoin (BTC) is scarcer than gold (XAU). Still, it’s worth only a tenth as much. In 2025, that valuation gap is becoming harder to ignore.

BTC Could Hit $1M If It Eats Gold’s Share

Bitcoin’s current stock-to-flow (S2F) ratio, a measure of scarcity based on existing supply divided by annual issuance, is around 120. For gold, it’s roughly 60, according to veteran analyst PlanB.

That means Bitcoin is now twice as scarce as gold by design. With supply halving every four years and a hard cap of 21 million coins, Bitcoin’s scarcity is pre-programmed.

Despite being less scarce, gold commands a $20 trillion market cap, compared to Bitcoin’s ~$2 trillion. This mismatch challenges conventional logic. If value is driven by scarcity—as gold’s history suggests—then Bitcoin is at least 10x undervalued at current prices.

Based on historical price behavior and current scarcity, Bitcoin should already be priced in the $1 million range, far above its current $119,000 valuation.

The Macro Environment Has Flipped in Bitcoin’s Favor

The macro environment in 2025 has decisively flipped in Bitcoin’s favor, marked by a rare convergence of regulatory clarity, institutional access, and monetary uncertainty.

The GENIUS Act, signed into law in July, introduced the first comprehensive federal framework for stablecoins and digital asset custody. It has reduced compliance risks for institutions and opened the door for more aggressive capital allocation into crypto.

Meanwhile, spot Bitcoin ETFs are recording record inflows, with giants like BlackRock and Fidelity absorbing billions in volume each week.

Adding to this momentum, the US government now holds Bitcoin as part of its Strategic Digital Reserve—a symbolic and structural shift in how digital assets are viewed at the sovereign level.

Together, these developments are pushing Bitcoin into the mainstream of global finance, but the market has yet to fully reflect that shift in price.

Bitcoin Mirrors Gold’s Breakout Structure

A striking technical similarity is emerging between gold’s historical breakout and Bitcoin’s current price action.

As shown in the chart, gold’s multi-decade trendline breakout in the early 2000s was followed by a prolonged consolidation — and then a parabolic surge that pushed its price to new all-time highs.

Bitcoin is now tracing the same pattern.

After rejecting a key diagonal trendline in late 2021—much like gold did in 1980 and again in 2011—Bitcoin has finally broken above the resistance in 2025, flipping it into support. The structure, timing, and breakout dynamics are nearly identical.

If history rhymes, Bitcoin could be on the cusp of a gold-style exponential move.