Bitcoin has seen a notable decline in recent market movements, coinciding with a broader sell-off in equities triggered by the Trump administration's announcement of new tariffs on major trading partners. Meanwhile, gold has reaffirmed its status as a traditional safe-haven asset. As of Tuesday, gold prices surged to $2,915 per ounce, inching closer to last week's record high of $2,950.
While gold’s rally reflects heightened investor demand for stability amid growing economic uncertainties, analysts argue that bitcoin is falling short of its aspirations as a safe-haven asset and market hedge.
"Bitcoin has never truly been a safe-haven asset—only an aspirational one," Paybis Chief Revenue Officer Uldis Teraudklans told The Block. "Yet, the promise remains, and with every cycle, critics revisit this so-called 'failure,' but my perspective is that bitcoin has consistently been a risk asset."
However, Teraudklans added that bitcoin is on a long-term trajectory toward becoming a safe-haven asset, suggesting that only when the digital asset's market capitalization matches that of gold can its role as a safe-haven be seriously evaluated.
Bitwise European Head of Research Europe André Dragosch told The Block that short-term perspectives also highlight bitcoin's volatility.
"In the very short term, bitcoin appears to be most sensitive to changes in the global growth outlook, which has certainly deteriorated lately," Dragosch said. "But, over the medium to long term, bitcoin continues to be the prime contender for the world’s next reserve asset and should also profit from a return of easy monetary policy in case a U.S. recession does really materialize."
The recent implementation of tariffs by the Trump administration has further complicated market dynamics.
"U.S. President Donald Trump's recent announcement regarding tariffs on goods from China, global tariffs on aluminum and steel, and threats of 25% tariffs on goods from the EU has rattled markets, increasing economic uncertainty," BullionByPost Managing Director Pete Walden observed. "Gold as the ultimate safe-haven asset has gained tremendously from this, as investors seek shelter from the uncertainty."
Gold will perform best in a global trade war. Image: Bank of America Global Fund Manager Survey.
In contrast, bitcoin's performance under similar market pressures has been less robust.
"The market is facing intense volatility as combined crypto liquidations hit $1.04 billion. The broader altcoin train has a double-digit decline, highlighting the uncertainty in the market at this time," WeFi Head of Growth Agne Linge told The Block. "Amid this price action, the conviction for sustainable growth in the near term remains low as significant headwinds lie ahead."
Furthermore, a Bank of America fund manager survey from February indicated that only 3% of fund managers viewed bitcoin as a reliable store of value amid trade tensions, while 58% favored gold. This sentiment aligns with bitcoin's recent volatility, including a 17.39% decline in the month of February — the largest drop since 2014.
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