CoinDesk recently published an analysis article by Francisco Rodrigues exploring a phenomenon that puzzles cryptocurrency supporters: why didn't Bitcoin act as a safe haven like gold when market turmoil arrived?
In the article, Rodrigues points out that, in theory, Bitcoin should perform well during uncertain times because it is a censorship-resistant "sound money." But the reality is quite the opposite—when panic hits the market, Bitcoin is often the first asset investors sell.
This divergence has been particularly evident in recent market performance. Since January 18th, when Trump first threatened to impose tariffs on NATO allies over the Greenland issue, Bitcoin has fallen by 6.6%, while gold has risen by 8.6%, approaching its all-time high of $5000.
Rodrigues believes that during periods of economic uncertainty, Bitcoin acts more like an "ATM machine," with investors quickly selling it to raise cash.
Bitcoin Has Become the Market's "ATM"
Why is Bitcoin sold off during crises? Rodrigues cites the view of Greg Cipolaro, Global Head of Research at New York Digital Investment Group (NYDIG), to explain this phenomenon. Cipolaro believes that Bitcoin's characteristics have instead become its "Achilles' heel."
"During periods of stress and uncertainty, liquidity preference dominates, and this dynamic hurts Bitcoin far more than gold," Cipolaro wrote in a report. Bitcoin's features—24/7 trading, deep liquidity, and instant settlement—make it the easiest asset to liquidate when investors need to raise cash quickly. In contrast, gold, while less liquid, is more likely to be held onto rather than sold by its holders.
This creates an interesting paradox: Bitcoin's advantages make it behave more like an "ATM" during a crisis. Cipolaro further pointed out: "Although Bitcoin is liquid relative to its size, it is still more volatile and is reflexively sold during deleveraging events.
Thus, in risk-off environments, regardless of its long-term narrative, it is often used to raise cash, reduce Value at Risk (VaR), and lower portfolio risk, while gold continues to serve as a true reservoir of liquidity."
Whale Behavior Exacerbates the Divergence
Beyond the inherent properties of the assets, the behavior of large holders is also exacerbating this divergence. The author points out that central banks have been buying gold at record levels, creating strong structural demand in the gold market. This sustained buying from the institutional level provides solid support for gold prices.
In stark contrast, according to the NYDIG report, long-term Bitcoin holders have been continuously selling. On-chain data shows that older, long-held coins are consistently moving to exchanges, indicating steady selling pressure. Rodrigues refers to this phenomenon as a "seller overhang," which weakens Bitcoin's price support.
"The exact opposite dynamic is playing out in the gold market. Large holders, particularly central banks, continue to accumulate the metal," Cipolaro added. This difference in institutional behavior effectively reflects the different status and recognition of the two assets within the traditional financial system.
Different Safe-Haven Scenarios, Different Choices
So, has Bitcoin lost its safe-haven value? The author believes the answer is not that simple. The key lies in how the market is pricing the current type of risk.
Rodrigues explains that the current market turmoil is seen as 'episodic'—driven by tariff threats, policy uncertainty, and short-term shocks. Gold has long been a hedge against this type of uncertainty, excelling during moments of immediate loss of confidence, war risks, and fiat currency devaluation that do not involve systemic collapse.
In contrast, Bitcoin is better suited for hedging long-term concerns, such as massive fiat devaluation or sovereign debt crises. "Bitcoin is better suited to hedge against long-term monetary and geopolitical chaos, and the slow erosion of trust that takes years, not weeks, to manifest," Cipolaro stated.
It's like having different medicines for different illnesses. If you are worried about short-term market volatility and policy risks, gold is the better choice; but if you are concerned about the long-term stability of the entire monetary system, Bitcoin might be the real 'insurance.' The author notes: "As long as the market perceives the current risks as dangerous but not yet fundamental, gold remains the hedging tool of choice."
