How Trump’s Trade War Is Affecting Bitcoin and Gold

Bitcoin or gold? Or Bitcoin and gold? Investors are weighing where to put their money in times of uncertainty—and no time is more uncertain than now. 

President Donald Trump’s tariffs—or threats of tariffs—have rocked markets, making “risk-on” assets like crypto less appealing. 

The price of gold hit a new high Monday, while Bitcoin dropped below $93,000, down about 14% from its all-time high price set on January 20. Bitcoin’s correlation to the precious metal is down significantly as investors flock to more traditional safe haven assets, experts told Decrypt.

Bitcoin proponents have long claimed that the cryptocurrency’s unique selling point is that it’s a long-term store of value—like gold. And sometimes, they are correlated: The two assets have moved in tandem in the past, when investors have flocked to a strong dollar. 

But things are up in the air now that President Donald Trump has taken office and issued a flurry of dramatic orders, and Bitcoin’s 90-day correlation with gold has remained close to zero, data provider Kaiko told Decrypt.

Case in point: The new commander in chief implemented tariffs against Canada, Mexico, and China on Saturday, causing crypto prices to drop sharply. 

After having a “friendly conversation” with Mexican President Claudia Sheinbaum two days later, he decided to pause tariffs—leading to a rebound in Bitcoin’s price. Meanwhile, gold soared. Trump later agreed to a similar pause with Canada as the two countries attempt to work out a deal, while tariffs against China ultimately did go into effect.

“The trade war could decouple the correlation in the short term as gold is a more established ‘safe haven’ asset, while Bitcoin—although often seen as a safe haven—is currently owned by a large investor base also trading highly speculative risk-asset meme coins and tech stocks,” Amberdata’s director of derivatives Greg Magadini told Decrypt. 

The reason for the decoupling is that Bitcoin is still performing less like a safe-haven and more like risk assets, such as tech stocks. The biggest cryptocurrency by market cap over the past seven days alone has swung from $105,893 per coin to as low as $92,876, CoinGecko shows.

“While Bitcoin has indisputably drawn investors as a similarly alternative store of value, its higher volatility makes it less reliable in times of economic uncertainty compared to gold,” Michael Petch, co-founder and CEO of gold investment platform Argo, told Decrypt.

Bitcoin as an asset is still finding its feet, say some (including Wall Street titan BlackRock), and even though its long-term gains by far outmatch gold, for now the 5,000-year old physical asset is still the go-to safe haven during times of chaos. 

“Investors don’t like uncertainty and Donald Trump brings a lot of uncertainty,” RIA Advisors portfolio manager Michael Lebowitz told Decrypt.

Edited by Stacy Elliott