Weakening US dollar fuels precious metals rally; why has BTC's decade-long performance far outpaced gold and silver?

The weak performance of the US dollar index (DXY) in 2025 is remarkable. According to media analyst Ethan Ralph, the dollar index has fallen nearly 10% over the past year, marking the worst annual performance in the past decade. This data tracks the relative strength of the US dollar against major fiat currencies such as the euro, yen, pound, Canadian dollar, Swedish krona, and Swiss franc.

Driven by ongoing dollar depreciation and the Federal Reserve’s loose monetary policy, the price pressures on scarce assets continue to increase. Analyst Arthur Hayes pointed out that this environment will provide strong support for store-of-value assets including precious metals and Bitcoin.

BTC and Precious Metals: Significant Divergence in a Decade Comparison

The performance gap between Bitcoin and precious metals has sparked intense discussion between the crypto community and traditional investors. According to analyst Adam Livingston’s statistics, since 2015, Bitcoin has achieved a cumulative return of 27,701%, while silver’s return over the same period is only 405%, and gold’s is 283%.

Even excluding Bitcoin’s first six years of development, Bitcoin’s performance in subsequent phases remains far superior to traditional precious metals. Livingston stated on his X platform, “From any reasonable time frame, precious metals have performed quite poorly relative to this top-tier asset.”

Skepticism and Counterarguments from Traditional Investors

Renowned gold advocate Peter Schiff quickly joined the discussion. As one of Bitcoin’s most outspoken critics, Schiff suggested that these assets should be compared over a four-year rather than a ten-year time frame. He claimed, “The market environment has changed; the era of Bitcoin is over.”

However, Matt Golliher, co-founder of Orange Horizon Wealth, offered an economic perspective to explain this phenomenon. Golliher pointed out that commodity prices tend to converge toward production costs over the long term. When prices rise, production activity increases accordingly, leading to faster supply growth, which then suppresses prices—unless the supply of the asset is strictly limited.

The Economics of Scarcity

Golliher added, “Many of the sources of gold and silver production that were not economically feasible a year ago have now become highly profitable at current price levels.” This observation reveals the relationship between supply-side flexibility and price.

In contrast, Bitcoin’s fundamental scarcity stems from its fixed supply cap. This non-expandable supply characteristic, in an environment of loose monetary policy and dollar weakness, gives BTC a unique value proposition.

Market Status and Outlook

2025 has seen historic rises in precious metals prices. Gold prices have surpassed a record high of $4,533 per ounce, and silver has approached nearly $80 per ounce. Meanwhile, Bitcoin is currently priced at $95,410, in a relative correction phase.

The debate over which asset can better preserve value in the long term continues, while changing market conditions—including dollar depreciation, Federal Reserve liquidity injections, and rising inflation expectations—are creating supportive conditions for various scarce assets.