Bitcoin fell to about $77,020 on Saturday, down more than 8 per cent, and is down nearly 13 per cent since the start of this year. The move comes despite a breakneck rally in the price of bullion and other precious metals as investors seek safety in the face of rising geopolitical tensions and tariff threats. Crypto advocates have long touted bitcoin as “digital gold”, a virtual version of the precious metal, and say that the cryptocurrency is a safe haven asset in times of stress. But Ilan Solot, senior global markets strategist at Marex Solutions, said Bitcoin is “an asset in search of a valuation model”, adding that “there’s no clear consensus” on what should drive its price.
Pramol Dhawan, managing director at Pimco, said bitcoin’s digital gold narrative had “vanished” and its price slide shows it is “not a monetary revolution”. Bitcoin hit record highs of nearly $125,000 late last year as investors cheered US President Donald Trump’s crypto-friendly moves, including appointing favourable regulators, stopping enforcement actions against crypto companies and passing landmark stablecoin rules. But since then its price has plunged. Other tokens including ethereum and solana have also sharply lost value since their peaks last year.
But traders are treating crypto as a riskier asset. “Bitcoin is being associated with the administration,” said a crypto venture capitalist, adding that it is “paying the price of being associated with the Republican party”. “Bitcoin’s correlation with gold is essentially unstable, swinging between strong positive and negative relationships depending on the dominant macro narrative,” analysts at crypto research firm Kaiko wrote.
“Tariff volatility exposed bitcoin’s ongoing identity crisis.” Solot said that the early adopters of bitcoin believed in its digital gold story but, as institutional investors piled in, “it’s not strictly that philosophical view” any more. “This was more an old school view that was put to the test and it didn’t pan out,” he added. Retail traders are now more excited by prediction markets Polymarket and Kalshi, he added.
Platforms such as Hyperliquid have become more popular among crypto experts, he added. For larger institutional investors, the rise of crypto perpetuals and digital asset treasury companies also “dilutes the capital and attention” away from pure bitcoin, he said.
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