The Compound
Gold Bugs Were Wrong, But They Made Money
10/17/2025, 3:36:25 PM
Economic Summary
- Crypto proponents have often predicted macro outcomes incorrectly, yet long positions (e.g., BTC holders) still generated gains, showing returns can diverge from narrative accuracy.
- The 2020s are historically unusual because both gold and U.S. equities (S&P 500) are rising strongly at the same time, a divergence from prior decades where one typically outperformed the other.
- Recent gold appreciation is primarily driven by central bank purchases rather than an imminent dollar collapse or fiat debasement narrative, implying institutional demand is a key price driver.
- Using one speculative asset to price another (for example, valuing equities in ounces of gold) is analytically flawed and can produce misleading conclusions about performance.
Bullish
- Holders stayed long and still profited despite wrong macro calls.
- Gold is up ~50% year-to-date, signaling strong performance.
- Central banks are buying gold, supporting prices.
Bearish
- Crypto and Bitcoin predictions have repeatedly been wrong despite long positions.
- Gold bugs' forecasts of dollar collapse and financial ruin have been incorrect.
- Pricing speculative assets in other speculative assets (e.g., stocks in gold) is misleading.
Bullish tickers
GOLDBTCSP500
Bearish tickers
BTCGOLDSP500
BTC
Bullish
Holders who remained long still made money; BTC benefitted from persistent demand.
Bearish
Crypto predictions repeatedly wrong; narrative failures despite price moves.
GOLD
Bullish
Gold up ~50% YTD and central bank buying is a clear driver supporting higher prices.
Bearish
Gold-bug macro forecasts (dollar crash, Fed ruin) were incorrect; some explanations for gains are wrong.
SP500
Bullish
U.S. equities are booming alongside gold in the 2020s, an uncommon simultaneous rally.
Bearish
When denominated in gold, equities have declined since 2000, suggesting weaker real performance.