Bitcoin Struggles as Safe-Haven Asset While Gold Surges on Global Uncertainty
Analysts say liquidity pressures and investor behaviour are weakening Bitcoin’s “digital gold” narrative.
Bitcoin is failing to live up to its reputation as “digital gold” as investors increasingly turn to physical gold during periods of geopolitical and market stress, according to new market analysis.
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The shift comes amid rising global tensions triggered by US President Donald Trump’s tariff threats against NATO allies over Greenland and speculation about potential military developments in the Arctic. Since January 18, when the tariff rhetoric first emerged, bitcoin has fallen 6.6 percent, while gold prices have climbed 8.6 percent to record highs near $5,000 per ounce.
Liquidity makes Bitcoin easier to sell
Market experts say the divergence highlights fundamental differences in how investors use each asset during times of uncertainty. Bitcoin’s 24/7 trading, high liquidity, and fast settlement make it one of the easiest assets to liquidate when investors need quick access to cash.
Gold, by contrast, is typically held during periods of crisis, reinforcing its long-standing role as a traditional safe-haven asset.
This dynamic is weakening bitcoin’s safe-haven narrative, according to NYDIG Global Head of Research Greg Cipolaro.
“Under periods of stress and uncertainty, liquidity preference dominates, and this dynamic hurts bitcoin far more than gold,” Cipolaro wrote.
“Despite being liquid for its size, bitcoin remains more volatile and reflexively sold as leverage is unwound. As a result, in risk-off environments, it is frequently used to raise cash, reduce VAR, and de-risk portfolios regardless of its long-term narrative, while gold continues to function as a true liquidity sink,” he added.
Central bank gold buying boosts demand
Another factor supporting gold’s rally is strong institutional demand. Central banks around the world have been purchasing gold at record levels, creating sustained structural demand for the metal.
Meanwhile, long-term bitcoin holders have been reducing exposure. On-chain data shows older bitcoin holdings moving toward exchanges, signalling a steady stream of selling pressure that analysts describe as a “seller overhang,” limiting price support.
“The opposite dynamic is playing out in gold. Large holders, particularly central banks, continue to accumulate the metal,” Cipolaro noted.
Different roles in market stress
Analysts also point to how markets are interpreting current risks. The present volatility is largely seen as episodic, driven by trade tensions, policy uncertainty, and short-term geopolitical shocks. Historically, gold has performed well as a hedge against these types of immediate confidence shocks.
Bitcoin, however, is viewed as better suited to long-term structural risks, such as currency debasement, sovereign debt concerns, and gradual erosion of trust in financial systems.
“Gold excels in moments of immediate confidence loss, war risk, and fiat debasement that does not involve a full system break,” Cipolaro said.
“Bitcoin, by contrast, is better suited to hedging long-run monetary and geopolitical disorder and slow-moving trust erosion that unfolds over years, not weeks. As long as markets believe the present risks are dangerous but not yet foundational, gold remains the preferred hedge.”
Outlook
With geopolitical uncertainty still high and central bank gold purchases continuing, analysts expect gold to remain the dominant safe-haven asset in the near term. Bitcoin’s performance, meanwhile, is likely to remain tied to broader risk sentiment and investor liquidity needs, keeping its “digital gold” status under pressure during market turbulence.