Bitcoin Struggles Amid Tariff Fallout, While Gold Continues to Shine as Safe Haven
Bitcoin (BTC) has continued its decline, falling more than 5% since President Trump’s tariff announcement on Wednesday, which triggered a broad market sell-off. The cryptocurrency, often touted as “digital gold,” has once again failed to meet the expectations of those who believed in its potential as a store of value or a safe haven in times of market turmoil.
Despite the sharp drop, some analysts believe this may be a turning point for Bitcoin. “This moment feels like a turning point,” said Joel Kruger, market strategist at LMAX Group. “We see market participants increasingly drawn to [BTC’s] appeal as a store-of-value asset and a compelling diversification tool amid the uncertainty.”
Kruger pointed out that while traditional markets like the Nasdaq and S&P 500 have reached new lows for the year, Bitcoin is holding above its year-to-date low of $75,000, a sign of “higher lows” that technicians view as an encouraging sign.
However, not everyone shares the same optimism. Javier Rodriguez Alarcon, the chief commercial officer at crypto exchange XBTO, disagreed with the notion that Bitcoin serves as a hedge against dollar-driven volatility. “Despite talk that bitcoin could act as a hedge against dollar-centric volatility, in practice, we’re still seeing a strong correlation between digital assets and broader risk markets in moments of uncertainty,” said Alarcon, a former Goldman Sachs executive.
Meanwhile, traditional safe havens like gold continue to outperform. JPMorgan analysts reiterated their belief that gold remains the primary beneficiary of inflation concerns and the ongoing “debasing” of currencies. “Bitcoin’s volatility and correlation with equities raise questions over its ‘digital gold’ narrative,” said Nikolaos Panigirtzoglou and his team at JPMorgan. They added that gold’s position as a safe haven continues to strengthen, with the precious metal rising steadily while Bitcoin’s appeal as a store of value remains uncertain.
Even with Bitcoin’s recent downturn, it still trades above JPMorgan’s estimated average production cost of $62,000, which has historically served as a lower boundary for the cryptocurrency’s price. On the other hand, gold remains just 1.25% lower at $3,126 per ounce, still close to its record high of around $3,200.
In the face of ongoing market turbulence, gold remains the preferred safe haven, with Bitcoin’s volatility continuing to challenge its position as a non-correlated asset.
