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Bitcoin's price has fallen to its lowest level since last year's tariff shock, putting its reputation as "digital gold" in question. On Saturday, Bitcoin fell to $77,020, a drop of more than 8%, and has lost nearly 13% of its value since the beginning of this year.
The decline comes at a time when gold and other precious metals have seen strong gains as investors seek safety in the face of geopolitical tensions and threats of trade tariffs. Gold has hit record highs in recent days, rising 23% and trading above $5,600 an ounce, although it fell sharply to around $4,800 on Friday.
Cryptocurrency advocates have been promoting Bitcoin as “digital gold” for years, claiming it is a safe haven in times of uncertainty. But Ilan Solot, senior global markets strategist at Marex Solutions, said Bitcoin is “an asset in search of a valuation model,” adding that “there is no clear consensus” on the factors that determine its price.
Meanwhile, Pramol Dhawan, managing director at Pimco, stated that the narrative of Bitcoin as digital gold "has disappeared", while the price drop shows that it is "not a monetary revolution".
Bitcoin had reached record levels, near $125,000, late last year as investors welcomed US President Donald Trump's cryptocurrency-friendly policies, including appointing favorable regulators, halting some punitive actions against crypto companies and approving regulations for stablecoins.
Since then, the price of Bitcoin has fallen sharply. Other cryptocurrencies such as Ethereum and Solana have also lost significant value compared to last year's peaks.
Threats of tariffs from Trump, demands to acquire Greenland, and geopolitical tensions with Iran and Venezuela have pushed investors toward gold and silver, while cryptocurrencies are increasingly being treated as high-risk assets.
“Bitcoin is becoming more and more associated with the administration,” said one crypto investor, adding that it is “paying the price of being associated with the Republican Party.”
According to analysts at research firm Kaiko, “Bitcoin’s correlation with gold is fundamentally volatile,” shifting from positive to negative depending on the macroeconomic narrative. “The fluctuations caused by tariffs have highlighted Bitcoin’s identity crisis,” they point out.
Solot adds that early Bitcoin adopters strongly believed in the idea of digital gold, but with the massive influx of institutional investors, this philosophical approach is no longer dominant. “ It was an old perspective that was put to the test and didn’t work ,” he said.
According to him, small traders are showing more interest in prediction markets like Polymarket and Kalshi, which allow betting on various global events, from politics to sports. Meanwhile, new platforms like Hyperliquid are gaining popularity, while for institutional investors, the rise of products like crypto perpetual contracts and digital asset treasury companies is “draining capital and attention” away from traditional Bitcoin.
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