Geopolitical crisis tears the market apart: Bitcoin's "digital gold" narrative faces a severe test again

Global markets are shaken by Trump’s new tariff threats against eight European countries, causing gold prices to rise to a historic high of approximately $4,670, while Bitcoin prices temporarily fell below $92,000.

Polymarket forecast data shows that the market’s expectation of Bitcoin reaching $100,000 before the end of January has sharply declined from 72% on January 15 to around 27%, indicating a significant shift in investor sentiment.

Geopolitical Shock

Recently, global financial markets were disturbed by geopolitical news. Trump threatened to impose additional tariffs on Denmark, Norway, Sweden, and five other European countries, directly targeting the longstanding sovereignty dispute over Greenland between the US and European nations.

Trump announced plans to impose a 10% tariff on US-bound goods from these countries starting February 1, 2026, and stated that if an agreement on the “comprehensive purchase of Greenland” is not reached, the tariff rate will rise to 25% on June 1.

European responses were swift and firm. The eight threatened countries issued a joint statement condemning the move as “undermining transatlantic relations and risking falling into a dangerous vicious cycle.” The EU also began considering retaliatory measures, including reimposing tariffs on US goods worth €93 billion, and possibly activating its anti-coercion tools. These tools could restrict US companies’ access to EU public procurement markets, investment opportunities, and financial services.

Market Safe-Haven Response

The escalation of geopolitical tensions immediately triggered a chain reaction in financial markets. In this environment, the safe-haven characteristics of different assets were validated, while the narrative of Bitcoin as “digital gold” was questioned.

Gold prices behaved exactly as traditional safe-haven assets would, attracting capital inflows during uncertain times. In stark contrast, Bitcoin prices responded with a drop. Market data shows Bitcoin once fell below $92,000, while gold surged to a new all-time high. This divergence seriously challenges the “digital gold” narrative for Bitcoin. Gold advocate Peter Schiff bluntly pointed out that if Bitcoin cannot match gold’s gains, its claim as “digital gold” will be undermined. This market event appears to be testing that very view.

Narrative Shakeup and Price Expectations

When global political risks rise, Bitcoin did not exhibit the typical safe-haven traits; instead, it declined alongside risk assets. This performance prompts a reevaluation of Bitcoin’s “digital gold” positioning. Market prediction data offers a window into market sentiment. The probability of Bitcoin reaching $100,000 before the end of January has sharply decreased, reflecting not only disappointment with recent price performance but also a waning confidence in Bitcoin’s macro safe-haven properties.

The volatile expectations data aligns with Bitcoin’s price performance. Gold shows classic safe-haven characteristics, while Bitcoin remains subdued, further damaging the “digital gold” narrative. Notably, although Bitcoin’s short-term safe-haven appeal is challenged, Polymarket forecast data indicates that traders still have a 59% expectation that Bitcoin will outperform gold throughout 2026.

Data Perspective Based on Gate Market

From the price data, Bitcoin shows resilience after the geopolitical shock, with a 2.55% decline in 24 hours but a 1.30% increase over 7 days. This suggests the market is gradually regaining balance after the short-term impact. Gate data indicates Bitcoin’s market cap remains at $1.84 trillion, with a market share of 56.42%, reflecting its continued dominance in the crypto space. However, the safe-haven attribute remains a core challenge the market needs to address.

In-Depth Analysis: Repositioning Asset Attributes

This market event provides a rare natural experiment, illustrating how different asset classes perform during risk events.

Market analysis generally suggests that Bitcoin’s recent performance resembles that of risk assets rather than safe havens. The underlying reason is complex: Bitcoin’s price still heavily depends on the liquidity of the US dollar system and the stability of US financial markets. Despite promoting “decentralization” and “globality,” when the US faces fundamental conflicts with its traditional allies, Bitcoin’s “US asset” nature is exposed, and its attractiveness diminishes.

A notable phenomenon is that large whales holding over 10,000 BTC have been continuously selling during recent volatility, while mid-sized holders with 10–1,000 BTC have been accumulating, providing some stability to the market. This divergence may indicate different investor types have varying judgments and strategies regarding the market.

Institutional Views and Market Outlook

Market analysts have differing interpretations of the current situation. Senior analyst Samer Hasn pointed out that Bitcoin’s downward trend is driven by profit-taking and risk aversion shifts. He explained that traders are digesting US political risks and the sudden escalation of geopolitical and trade tensions.

CoinShares’ research offers a more macro perspective. In a recessionary environment, if the Federal Reserve adopts aggressive stimulus policies, Bitcoin could break through $170,000. Conversely, in stagflation scenarios, Bitcoin prices might fall into the $70,000–$100,000 range. These scenario analyses highlight the profound impact of macroeconomic factors on Bitcoin’s price.

Institutional capital flows are also noteworthy. According to Grayscale reports, US Bitcoin ETF assets under management grew by 45% by the end of 2025, reaching $103 billion. This indicates that despite short-term challenges, institutional adoption of Bitcoin continues to steadily advance, potentially supporting long-term prices.

Bitcoin’s price retreated amid geopolitical crises, while gold prices soared to historic highs. The market turbulence triggered by the Greenland dispute has gradually subsided, but Bitcoin remains around $92,653. Polymarket’s forecast shows that market confidence in Bitcoin reaching $100,000 in the short term has fallen from a high of 72%. As global trade dynamics evolve, the total liquidation amount of crypto contracts on the network has reached $684 million, with nearly 240,000 traders forced to liquidate during this turmoil.