In theory, Bitcoin is expected to flourish amid uncertainty due to its nature as censorship-resistant sound money. However, in reality, it often becomes the first asset investors liquidate when faced with pressure.
Over the past week, geopolitical tensions escalated following former President Trump’s tariff threats against NATO allies concerning Greenland and rumors of possible military actions in the Arctic. This caused markets to retreat and volatility to surge.
Since January 18th—when Trump initially threatened tariffs while pursuing Greenland acquisition—Bitcoin has declined by 6.6%, whereas gold surged by 8.6%, reaching new highs near $5,000.
The divergence stems from how these assets are utilized during stressful market conditions. Bitcoin’s continuous trading availability, high liquidity, and instant settlement make it an easy option for investors needing quick cash outflows.
Conversely, gold tends to be retained rather than sold despite being less accessible. This behavior positions Bitcoin more like a “cash machine” during panic selling episodes rather than fulfilling its reputation as digital gold, explains Greg Cipolaro, NYDIG’s Global Head of Research.
“During periods marked by stress and uncertainty, liquidity preference dominates,” says Cipolaro, “and this dynamic adversely impacts Bitcoin much more than gold.”
“Although liquid relative to its size, Bitcoin remains highly volatile and is reflexively sold off as leverage unwinds. Therefore, risk-off scenarios frequently see it used for raising cash or de-risking portfolios regardless of its long-term narrative. Meanwhile, gold continues functioning as a genuine liquidity refuge,” he added.
The situation is further complicated by large holders’ behaviors.
Central banks have been accumulating gold at unprecedented rates creating strong structural demand while long-term Bitcoin holders appear increasingly inclined toward selling according to NYDIG data.
On-chain analytics reveal that older Bitcoins continue moving toward exchanges indicating ongoing sales pressure—a “seller overhang”—a factor suppressing price support. “The opposite trend applies in gold where major holders especially central banks keep increasing their reserves,”—says Cipolaro.
This mismatch also reflects how risk is currently priced in markets: The present turbulence seems episodic—triggered by tariffs, policy uncertainties,and short-lived shocks—and historically such conditions favor gold as a hedge asset.
By contrast,BTC suits longer-term risks such as fiat currency depreciation or sovereign debt crises better than immediate shocks.”