Bitcoin struggles to assume its role as a safe haven amid political tensions around Powell

Since its launch in 2009, Bitcoin has been celebrated as a decentralized alternative, a safeguard against monetary policy excesses, and an asset capable of thriving during geopolitical crises. Yet, in early February, the largest digital asset revealed its limitations as a safe haven, overtaken by traditional values like gold. This weakness occurs in a highly charged context: a federal criminal investigation targeting Federal Reserve Chairman Jerome Powell, increased tensions with President Donald Trump, and an macroeconomic environment that refuses to play along with bullish expectations.

The Demonstration of Weakness of a Bitcoin Expected as a Safe Haven

Recently, during a key market day, Bitcoin initially appeared to react as a true safe-haven asset. Starting at $92,000 during Asian hours, it briefly outperformed the weakness of U.S. stock indices. But this divergence proved to be short-lived. The price retreated to $90,500 during European hours, while the entire crypto market followed the same downward trajectory.

Conversely, traditional safe-haven assets dominated. Gold rose to surpass $4,600 per ounce, setting a new all-time high. Silver also reached its peak at around $84. These figures starkly contrast with Bitcoin’s decline, raising fundamental questions: Can Bitcoin still be considered a true safe haven in the face of macroeconomic and geopolitical turbulence?

Confidential Altcoins: Between Volatility and Increased Regulation

Alongside Bitcoin’s weakness, the market for confidential cryptocurrencies showed particular dynamism, albeit turbulent. Monero, the leading privacy-focused coin, went from record highs near $598 to $571, still showing a 15% increase over 24 hours. This movement reflects persistent interest in assets offering privacy, despite—or perhaps because of—increasing regulation.

Moreover, the definition of privacy coins like ZEC (Zcash) is becoming a central issue in regulatory debates. The United Arab Emirates’ Central Bank recently tightened its frameworks by banning privacy tokens within its international financial center, highlighting tensions between cryptographic innovation and regulatory compliance. These restrictions are gradually redefining the role and viability of privacy technologies on blockchain.

Powell Under Pressure: The Fed’s Independence in Question

The environment weakening Bitcoin as a safe haven largely stems from political tensions surrounding the Federal Reserve. Chairman Jerome Powell found himself at the center of a political and judicial storm when his office revealed federal prosecutors had launched a criminal investigation into him. This inquiry concerns his testimony to Congress regarding a major renovation of the Fed’s headquarters, estimated at $2.5 billion.

Powell interpreted this action as an attempt at political pressure aimed at weakening the institution’s independence, in reaction to his refusal to cut interest rates aggressively as the Trump administration desired. This dynamic creates major uncertainty: if markets fear a real loss of autonomy for the Fed, why isn’t Bitcoin appreciating? The answer lies in bond market expectations.

Treasury Yields Hold Steady: No Short-Term Rate Cuts

Despite political pressures on Powell, U.S. Treasury yields remained high. The 10-year yield crossed the 4.2% mark, while the 2-year yield stood at 3.54%, its highest in two weeks. These elevated levels send a clear signal: markets do not expect rate cuts despite political turbulence.

ING analysts suggested two key factors could keep the Fed on the defensive: first, the unexpectedly low U.S. unemployment rate reported in December, and second, inflation data likely higher than expected for January. These two factors combined reduce the likelihood of rate cuts before at least March 2026. For digital assets, this means persistent tight liquidity conditions and high borrowing rates, unfavorable for speculative activity.

ETF Flow Anomalies: Strategic Reallocation or Early Warning Signs?

Cryptocurrency ETF flow data reveal a nuanced dynamic. From January 5 to 9, spot Bitcoin ETFs experienced net outflows totaling $681 million, a notable figure considering trading volumes exceeded $19.5 billion. Far from indicating a mass exodus of investors, these figures point more to active reallocation: capital is being redistributed rather than leaving the market entirely.

Ethereum ETFs also recorded weekly outflows of $69 million, following a similar trajectory. Conversely, XRP and Solana ETFs continued to attract fresh capital, reinforcing an emerging theme: risk appetite remains selective rather than widespread. This fragmentation suggests that some segments of the crypto market retain attractiveness, while benchmark assets lose momentum.

Technically, LINK Tests Resistance: Correction or Consolidation?

On the technical side, Chainlink’s LINK token shows an interesting profile for tactical traders. The token’s price is currently testing the downward trendline drawn since August’s peak. A bullish breakout of this resistance could potentially trigger increased demand and support a rebound. However, in an environment of high rates and increased macroeconomic uncertainty, short-term prospects remain mixed.

Analysis of 30-day implied volatility indices confirms this lull: Bitcoin and Ethereum volatilities remain at the lowest levels seen in weeks. This volatility compression, often a precursor to large moves, could signal corrective movements or prolonged consolidation before any new direction.

Conclusion: Bitcoin Facing the Limits of Its Safe-Haven Narrative

The stark contrast between gold’s performance and Bitcoin’s reveals an uncomfortable truth: Bitcoin’s narrative as an immutable safe-haven asset is being put to the test. Political uncertainty around Powell and the unwavering trajectory of bond yields create an environment where digital assets struggle to find a clear direction.

Meanwhile, regulatory questions continue to shape the market, especially for confidential technologies like ZEC and Monero. The evolving definition of these assets within global regulatory frameworks will add an extra layer of complexity. For investors, this period marks a shift toward increased selectivity: identifying resilient crypto exposures amid macroeconomic headwinds and emerging regulatory restrictions.