Bitcoin Struggles to Prove Its Haven Status as Trump Return, Geopolitics Spark Safety Rush

(Bloomberg) -- After outperforming most asset classes in 2024, Bitcoin now finds itself under pressure as Donald Trump's White House return and heightened geopolitical instability spark a rush for safe haven investments.

Bitcoin’s status as a haven asset has come under scrutiny after the cryptocurrency lagged behind traditional safe havens such as gold during the first two months of 2025.

While Bitcoin outperformed most asset classes in 2024, its year-to-date gains trail those of gold and other precious metals, according to data compiled by Bloomberg. The precious metal has gained about 9% so far this year, reaching a record high of $2,882 an ounce after President Donald Trump on Feb. 4 said the US could take over Gaza — a comment his aides later sought to tone down. Bitcoin, meanwhile, is up just over 3% year-to-date and trades about 10% below its peak.

Bitcoin has often 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, rendering it immune to the kind of inflationary pressures that can erode the value of fiat currencies.

But while 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, Bitcoin has largely failed to live up to the billing. Instead, the cryptocurrency has traded in near-lockstep with technology stocks, rendering it more sensitive to the kind of risk appetite that waxes and wanes with the broader market.

“Bitcoin is not a hedge against a market downturn,” Aoifinn Devitt, senior investment advisor at Moneta Group LLC, said in an interview with Bloomberg TV on March 13. “In a market where the US dollar is remaining strong, Bitcoin’s appeal as a hedge is muted.”

Still, Bitcoin advocates hope the token’s intrinsic qualities will eventually see it behave more akin to a store-of-value. 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 riski