Why Does Bitcoin Lose Out Against Gold? The Dilemma of Ancient Coins in Times of Crisis

When markets shake, bitcoin doesn’t always behave as we expect. During the recent geopolitical tensions triggered by threats of tariffs and speculation about conflicts in the Arctic, the data revealed an uncomfortable reality: while bitcoin retreated 6.6% since January 18, gold advanced 8.6% towards highs near $5,000. Most telling is how old coins moved during this volatility, providing key clues about the true nature of crypto markets in times of panic.

When it’s time to sell: Bitcoin acts as an ATM, not a safe haven

The theory suggests that bitcoin should shine in times of uncertainty: it is sound money, censorship-resistant, free of government control. But practice tells a different story. In times of stress, investors sell bitcoin before gold, turning the cryptocurrency into what Greg Cipolaro, NYDIG’s Global Director of Research, describes as an “ATM” rather than a safe haven.

The reason is mechanical. Bitcoin is continuously traded, offers deep liquidity, and can be converted to cash instantly. Gold, despite being less accessible, tends to be retained. “In periods of stress, liquidity preference dominates,” Cipolaro explained. “Bitcoin, being liquid for its size, remains more volatile and automatically liquidates while leverage is undone.”

The Movement of Ancient Coins Reveals the True Market Dynamics

This is where the situation gets interesting. On-chain data shows that old coins—those bitcoin positions accumulated years ago—are migrating to exchanges at a steady pace. This movement is not accidental; It reflects that long-term holders are capitulating, selling to reduce risk during periods of market aversion.

This “over-selling” undermines price support. When ancient coins move, it’s usually a sign that even long-term believers are opting for liquidity over conviction. It’s a fundamental shift that explains why bitcoin struggles in these situations while gold resists.

Central Banks vs Long-Term Holders: The Gap That Defines Prices

The dynamics of large holders amplify this divergence. Global central banks have been buying gold at record levels, creating sustained structural demand. Simultaneously, long-term bitcoin holders are doing the opposite: selling.

“The opposite dynamic is playing out in gold,” Cipolaro said. “Large holders, especially central banks, continue to hoard the metal.” This asymmetry—institutions buying gold while selling old bitcoin coins—explains much of the divergence in yield between the two assets during volatile periods.

Safe Haven or Risk Bubble? The Temporary Nature of Each Asset

The inconvenient truth is that bitcoin and gold serve different purposes over different time horizons. The current turbulence—driven by threats of tariffs and political shocks—is considered episodic, short-term. Gold has functioned for decades as a hedge against this kind of immediate uncertainty.

Bitcoin, on the other hand, is better designed for long-term risks: depreciation of fiat currencies, slow erosion of monetary confidence, sovereign debt crises that unfold over years, not weeks. “Gold excels in times of immediate loss of confidence and risk of devaluation,” Cipolaro explained. “Bitcoin is better suited to hedge against the slow-unfolding long-term monetary and geopolitical mess.”

As long as markets view current risks as dangerous but not fundamental, gold will remain the preferred hedge.

Ripple and the Rest: How Risk Aversion Hits the Entire Crypto Portfolio

The pressure is not limited to bitcoin. XRP fell roughly 6.73% over the past 24 hours, down from $1.91 to $1.79, as bitcoin’s pullback triggered a widespread risk-off in higher volatility assets.

The slide accelerated as XRP broke below key support around $1.87 with heavy volume, erasing the previous week’s gains before buyers stepped in near the $1.78-$1.80 zone. Traders now see $1.80 as a critical support level, requiring a sustained move above $1.87-$1.90 to signal a correction rather than the start of a deeper decline.

Meanwhile, projects like Pudgy Penguins continue to emerge as strong NFT brands in this cycle, transitioning from speculative “digital luxury” to multi-vertical IP platforms, with adoption strategies ranging from retail toys to tokenized ecosystems.

Market Lesson: Understanding the Moment, Not Just the Asset

Recent volatility exposes a truth that many investors forget: each asset has a specific role depending on the temporal context. Older bitcoin coins moving to exchanges are not a sign that bitcoin has permanently failed, but rather that the market is prioritizing immediate liquidity over long-term narratives.

For bitcoin to deliver on its promise as a hedge, it needs investment horizons to lengthen and uncertainty to be perceived as systemic, not episodic. Until then, gold will continue to win the battle in these turbulent periods.