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For example, see the below graph from https://charts.woobull.com/bitcoin-vs-gold/
It seems that intention is to isolate the effect of US dollar when assessing bitcoin's value, e.g. BTC quoted in US dollars mean it will inevitably be subject to the US dollar fluctuations and demand, as opposed to only its demand.
But does this metric achieve this? If not, how can it be interpreted?
It's BTC per Oz gold which shows how many btc you need to pay for 1oz. To compute this, you need to know the price (and both are quoted in USD). It still tells you a lot about the purchasing power. A lot less compared to the USD price though, because I doubt many people use Oz of gold as their unit of account.
However, everyone kind of knows gold is worth a lot. Going from having to spend 1 million BTC to only a fraction of one BTC means it must be gaining a lot more than gold. It's like many charts some rather useless ratio (happy to see other opinions).
I am not sure what the chart intends to show. In any case, the series in question is how many BTC you need to pay for one ounce of gold. The scale is logarithmic by the way.
If you overlay the inverse dollar price, you will see that the movement is largely identical to the BTC-Oz chart. Gold price changes are miniscule compared to BTC, so almost all variation is due to BTCUSD price fluctuations.
I only used FRED where BTC is only available from end of 2014 and the IBA Gold Fixing Price 3:00 P.M London.
Therefore, I zoomed into the chart in woobull.
replicated it - and added the inverse BTC price.
I hope this helps to answer how much it "removes the value of USD".
In my humble opinion, it is a rather meaningless chart.
Edit
The line showing how many bitcoins you need for one oz of gold is very similar in shape to the inverse BTCUSD price (USDBTC). The reason is that gold had a range (max value - low value) of USD 953.2 in the observation period, whereas BTC's range was USD 64561.23. This means that essentially all the variation you see in that chart comes from the BTCUSD price.
This is also the reason the author used the logarithmic scale. I post the original scale below. Even though I lack the time where bitcoin was worth close to nothing, you still see that it looks as if the price of bitcoin relative to gold hardly moves in the end. This is due to the lower bound of 0, and any further increase in BTCUSD price is simply getting you a bit closer to 0. If it is 0.02 or 0.04 will be invisible to the human eye in that case, although it is a massive change in the value of BTC.
In terms of standard deviations, BTCUSD had a STDV of 15974.84. That of gold was 256.07.
