Bitcoin Under Pressure as Donald Trump’s White House Return and Heightened Geopolitical Instability Spark a Rush for Safe Haven Investments

Bitcoin has gained just over 3 per cent year to date, trailing gold's 9 per cent jump, according to data compiled by Bloomberg.

Bitcoin has massively underperformed most other asset classes in 2024, as Donald Trump’s return to the White House and heightened geopolitical instability have sparked a rush for safe haven investments.

Bitcoin has gained just over 3 per cent year to date, trailing gold’s 9 per cent jump, according to data compiled by Bloomberg. The precious metal reached a record high of US$2,882 an ounce after Trump on Feb 4 said the US could take over Gaza – a comment his aides sought to tone down. Bitcoin is currently about 10 per cent below its peak.

While Bitcoin has been described as a store-of-value similar to gold because of the cryptocurrency’s in-built scarcity – its supply is capped at 21 million – the token has not lived up to the billing. Gold’s enduring appeal during times of economic turmoil has been amplified by recent developments such as the US-China trade war and the threat of tariffs. Contrastingly, Bitcoin has often moved in near-lockstep with technology stocks.

“Bitcoin has performed poorly this year, largely due to the fact that it is being treated as a high-beta asset,” said Vijay Ayyar, head of Asia-Pacific at crypto exchange Luno. “This is despite the narrative around Bitcoin being touted as an inflation hedge, which has not played out as expected.”

Still, Bitcoin advocates hope that the token’s intrinsic qualities will see it behave more akin to a store-of-value in time. The advent of exchange-traded funds that invest directly in the largest digital asset will “gradually decrease volatility and likely see investors chasing volatility move to more riskier cryptocurrency assets”, said Paul Howard, senior director at market maker Wincent.