Over the past decade, the narrative surrounding Bitcoin has shifted significantly from its original conception as a peer-to-peer digital cash system, as outlined in the initial whitepaper, to a view of it as a store of value, often referred to as “digital gold.” This transformation has led to the belief that Bitcoin could serve as an apolitical form of base money tailored for the digital era, with its monetary policy established at the network’s inception in 2009. Larry Fink, the CEO of BlackRock, pointed out that Bitcoin is increasingly viewed as an “asset of fear,” primarily motivated by concerns over currency debasement.
However, criticisms have emerged regarding Bitcoin’s efficacy as a safe haven during global economic crises. The cryptocurrency has faced significant price volatility, particularly during economic downturns. For instance, it experienced one of its most severe crashes when COVID-19 was officially declared a pandemic in March 2020. Recently, Bitcoin’s value dropped approximately 10% in response to rising tensions between the U.S. and Europe concerning Greenland’s territorial claims, along with instability in the Japanese bond market. Last October, the broader crypto market suffered a disastrous plunge, including liquidations of $16 billion in leveraged positions, largely amid heightened trade conflicts between the U.S. and China. While many of those liquidated positions involved more speculative cryptocurrencies, the overall trend raised questions about Bitcoin’s resilience.
In contrast, traditional gold has demonstrated better performance during similar periods, gaining around 5% over the past week alone. In fact, gold outperformed Bitcoin significantly in 2025, challenging the perception that Bitcoin, often considered less stable and more speculative than gold, can consistently fulfill its role as a safe asset. Despite increasing institutional interest from prestigious universities, nation-states, and leading asset management firms, central banks—as exemplified by China’s policies—prefer tangible gold over its digital counterpart.
Nonetheless, Bitcoin does retain functional utility, particularly in regions facing economic sanctions, such as Iran and Venezuela, where local populations have sought refuge in the Bitcoin network. Although stablecoins, which are pegged to the dollar, are gaining traction for similar uses, they are still subject to freezing by their centralized issuers. This ongoing dynamic does not preclude Bitcoin from eventually achieving its long-term objectives. After its initial COVID-19 crash, Bitcoin embarked on a remarkable ascent, achieving a 4,000% rise to a peak of around $125,000 last year before settling back to about $90,000.
Despite its current stature with a market capitalization now measured in trillions, Bitcoin continues to exhibit patterns akin to tech stocks during periods of economic strain, indicating that it remains in the formative stages of its development. Moving forward, for Bitcoin to solidify its status as the digital gold it aspires to be and to form the basis of a new monetary standard in the 21st century, it will need to demonstrate greater stability and reliability in the face of economic volatility.
