{"id":6927,"date":"2025-11-25T12:18:14","date_gmt":"2025-11-25T12:18:14","guid":{"rendered":"https:\/\/friscotimes.org\/?p=6927"},"modified":"2025-12-02T08:44:04","modified_gmt":"2025-12-02T08:44:04","slug":"bitcoin-price-plunges-while-gold-rises-destroying-crypto-safe-haven-narrative","status":"publish","type":"post","link":"https:\/\/friscotimes.org\/?p=6927","title":{"rendered":"Bitcoin price plunges while gold rises, destroying crypto \u2018safe haven\u2019 narrative"},"content":{"rendered":"


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After a brief five-day rally, Bitcoin<\/a> once again continued its downward plunge, losing another 1% between 7 p.m. ET last night and 6 a.m. this morning. It is at $87K at the time of writing. In large part, that reflected a general risk-off attitude across global markets this morning. S&P 500 futures were down 0.19% after the index closed up 1.55% yesterday. Asia was mixed this morning, and Europe followed by moving flat-to-down in early trading.<\/p>\n

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Crypto may be suffering from a significant shift in sentiment: Until Oct. 6 this year, Bitcoin and gold had moved up together, though certainly not in tandem. However, both rose on a \u201csafe haven\u201d narrative as stocks soared, despite worries that the tech companies driving them are fueling an AI bubble.<\/p>\n

When the U.S. government shut down, both gold and Bitcoin hit record highs. Deutsche Bank analysts even argued that Bitcoin would soon be bought by global central banks as a new reserve asset on their balance sheets (even though crypto is \u201cbacked by nothing,\u201d they said).<\/p>\n

A month on, the \u201cBitcoin is digital gold\u201d and thus a \u201cstore of value<\/a>\u201d argument is seemingly in tatters, as Bitcoin and gold have diverged. Gold is moving toward a new record high while \u201cthe crypto market\u2019s total capitalization has now fallen by about 24% (over $1 trillion) since its October peak,\u201d according to a note by Deutsche Bank\u2019s Marion Laboure and Camilla Siazon shared yesterday.<\/p>\n

Gold, by contrast, looks unstoppable. \u201cGold has just delivered its most extraordinary year in more than four decades. Prices surged more than 50% in 2025 so far, making it the metal\u2019s best performance since 1979,\u201d according to ActivTrades analyst Carolane de Palmas.<\/p>\n

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Two major factors are uncoupling the fortunes of gold and Bitcoin<\/h2>\n

First is that the Bitcoin ETF trade has seen a sharp unwinding over the past few days. When traditional finance platforms launched Bitcoin ETFs, there was a huge influx of interest, as retail investors (who previously may not have felt confident enough to create a crypto wallet) decided to enter the market. But with the price of Bitcoin plunging over the past 30 days, hundreds of millions of dollars have poured out of those ETFs, as this chart from Deutsche Bank shows:<\/p>\n

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\u201cEvery $1 billion that leaves a Bitcoin ETF pulls down the price of Bitcoin by 3.4%,\u201d according to Alex Saunders at Citi Research<\/a>.<\/p>\n

The second major factor pushing up gold is, ironically, crypto. Tether, the issuer of the USDT stablecoin, has become a buyer of gold on a scale comparable to central banks. Tether maintains USDT on a 1:1 peg with the U.S. dollar by backing each coin with the dollar equivalent in cash, bonds or\u2014more recently\u2014gold bullion. This year alone, Tether\u2019s gold buying is the equivalent of 12% of all central bank gold buying, according to Jefferies<\/a>.<\/p>\n

For crypto investors, stablecoins (as the name suggests) offer respite from the fluctuations of Bitcoin. So the more Bitcoin declines, the more crypto investors move into stablecoins like USDT while they await a turnaround, and the more gold gets bought to back those stablecoins\u2014pushing up the price of the yellow metal. Thus begins a spiral that widens the divergence between gold and Bitcoin over time.<\/p>\n

Here\u2019s a snapshot of the markets ahead of the opening bell in New York this morning:<\/strong><\/p>\n