Bitcoin and digital currencies lose ground as a safe haven compared to gold

In recent days, the markets have experienced significant geopolitical turbulence, revealing an uncomfortable reality: bitcoin and other digital currencies are not serving as the protection they many believed they had acquired. As international tensions have intensified around tariff threats and military intervention speculation, the market has spoken clearly. Bitcoin has recorded a 6.6% loss since January 18, while gold has gained 8.6%, approaching $5,000. This divergence is far from casual: it reveals a structural fragility in how bitcoin is perceived and used by institutional and retail investors during periods of stress.

Why currencies like bitcoin act as a safety valve, not a refuge

The reason for this disappointing performance lies in the very nature of liquidity. Bitcoin, despite its reputation as a revolutionary digital asset, behaves like an “ATM” when markets enter panic mode. Investors sell it quickly to raise cash and reduce their portfolio risk.

Digital currencies have a characteristic that initially seems advantageous: instant liquidity. But in times of market stress, this becomes a vulnerability. As Greg Cipolaro, Global Head of Research at NYDIG, explains, “In periods of uncertainty, the preference for liquidity dominates, and this dynamic harms bitcoin much more than gold.”

The mechanism is simple: when investors need to reduce risk and lower leverage, they first turn to the most easily liquidated assets. Bitcoin, although still volatile, becomes a liquidity collection tool rather than a protective hedge. Conversely, gold tends to be held rather than sold, maintaining its role as a traditional safe haven during crises.

Gold vs Bitcoin: differences in structural demand

Behind these numbers are completely different behaviors among major holders of these two assets. Central banks around the world are buying gold at record levels, creating a solid and lasting structural demand. Meanwhile, on-chain data shows that long-term bitcoin holders are selling, with old coins continuously flowing to exchanges.

Cipolaro adds: “The opposite dynamic is happening with gold. Major holders, especially central banks, continue to accumulate the metal.” This excess supply from bitcoin sellers weakens price support, while gold benefits from steady institutional buying.

Immediate risks vs long-term concerns: where bitcoin makes sense

Here emerges a crucial point often overlooked: bitcoin and gold are not direct competitors for the same type of risk. The current turbulence—driven by political threats, tariffs, and geopolitical shocks—is perceived by the market as episodic and resolvable in the short term. Gold has been the preferred hedge for this kind of immediate uncertainty for centuries.

Bitcoin, on the other hand, is more suited to protecting against risks that develop slowly over time: fiat currency devaluation, sovereign debt crises, or deteriorating trust in monetary institutions. As Cipolaro emphasizes, “Bitcoin is better suited to cover long-term risks of monetary and geopolitical disorder and the erosion of trust that proceeds slowly and develops over years, not weeks.”

As long as markets consider current risks to be concerning but not yet systemic, gold will remain the preferred hedge. Bitcoin will regain its value when uncertainty becomes structural—not when it lasts a few weeks.