In theory, bitcoin should thrive in times of uncertainty because it is a strong currency that is resistant to censorship. In practice, this becomes the first thing investors sell when push comes to shove.
As geopolitical tensions escalated last week, following Trump’s threats of tariffs against NATO allies over Greenland and speculation about possible military action in the Arctic, markets fell and volatility increased.
Since January 18, after Trump first threatened to impose tariffs as part of his campaign to acquire Greenland, bitcoin has lost 6.6% of its value, while gold has risen 8.6% to new highs near $5,000.
The reason lies in how each asset fits into portfolios during times of stress. Bitcoin’s permanent trading, high liquidity, and instant settlement make it an easy asset to offload when investors need to raise cash quickly.
Gold, although less accessible, tends to be held rather than sold. This makes Bitcoin behave more like an “ATM” during periods of panic, damaging its reputation as digital gold, according to Greg Cipolaro, global head of research at NYDIG.
“In times of stress and uncertainty, the preference for liquidity dominates, and this dynamic hurts bitcoin far more than gold,” Cipolaro wrote.
“While liquid for its size, bitcoin remains more volatile and reflexively sold as leverage is unwound. As a result, in risk-free environments it is frequently used to raise liquidity, reduce VAR and de-risk portfolios, regardless of its long-term narrative, while gold continues to function as a veritable liquidity sink,” he added.
Large holders don’t help either.
Central banks are buying gold at record levels, creating strong structural demand. Meanwhile, long-term bitcoin holders are selling according to the NYDIG report.
Onchain data shows that vintage pieces continue to move onto exchanges, suggesting a steady stream of sales. This “seller surplus” attenuates price support. “The opposite dynamic is playing out in the case of gold. Large holders, particularly central banks, continue to accumulate the metal,” Cipolaro added.
Added to this mismatch is the way markets assess risk. The current turbulence is considered episodic, driven by tariffs, political threats and short-term shocks. Gold has long served as a hedge against this kind of uncertainty.
Bitcoin, on the other hand, is better suited to longer-term problems, like the devaluation of fiat currencies or sovereign debt crises.
“Gold excels in moments of immediate loss of confidence, risk of war and devaluation of fiat currencies that do not involve a complete breakdown of the system,” Cipolaro added.
“Bitcoin, on the other hand, is better suited to hedge long-term monetary and geopolitical turmoil and the slow erosion of trust that plays out over years, not weeks. As long as markets believe current risks are dangerous but not yet fundamental, gold remains the preferred hedge.”
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