GuShiio.com ① With the return of Donald Trump to the White House and the intensification of geopolitical instability, the market has set off a wave of safe-haven investment;
② Statistics show that Bitcoin’s increase so far this year is slightly more than 3%, far behind gold’s 9% increase over the same period.
Cailian News, February 9 (Editor Xia Junxiong)After significantly outperforming most asset classes in 2024, Bitcoin is now under pressure. With Donald Trump’s return to the White House and geopolitical instability intensifying, markets are on a wave of safe-haven investment.
Statistics show that Bitcoin’s year-to-date increase is slightly more than 3%, far behind gold’s 9% increase over the same period.
Bitcoin’s current price is more than 10% below its peak hit last year. As the market expects Trump to launch policies that will benefit the cryptocurrency industry in his second term, Bitcoin hit record highs at the end of last year, with the price once approaching US$110,000 per piece.
Although Bitcoin is often described as a store of value similar to gold due to its inherent scarcity (supply is limited to 21 million coins), this token has not yet fully realized this feature at least. Bitcoin’s movements are often highly correlated with technology stocks.
Aoifinn Devitt, senior investment adviser at Moneta Group LLC, said that although Bitcoin can be seen as an asset to hedge fiat currencies, its appeal has been curbed in the current market environment of a strong U.S. dollar.
“Over time, Bitcoin may gradually develop market-independent characteristics, but currently it behaves more like the riskiest asset,” Devitt said.
In contrast, as one of the most typical safe-haven assets, gold has benefited from a series of recent turmoil. Trump has frequently issued tariff threats to various countries and claimed that the United States may take over the Gaza Strip. Boosted by this, spot gold prices surged to US$2,886.84 per ounce on Friday, setting a new record high.
Institutions such as Citigroup, ING and UBS are optimistic that gold will rise to US$3000 per ounce. Both UBS and ING expect that the Federal Reserve will still have room to cut interest rates this year, and interest rate cuts may drive increased gold buying. Gold does not generate interest and therefore performs better in a low-interest-rate environment.
ING also pointed out that Trump’s recent remarks about the Gaza Strip have exacerbated geopolitical uncertainty.
At the same time, central banks remain important buyers of gold and are likely to continue to buy gold on a large scale this year to reduce dependence on the U.S. dollar.
