The cryptocurrency market is facing a significant downturn, while gold continues to shine as a safe-haven asset. Since Donald Trump’s inauguration on January 20, 2025, Bitcoin has experienced a sharp decline, dropping from $106,394 to $83,888 by March 4, 2025—a 21% loss. This plunge has wiped out nearly $1.2 trillion from the total crypto market cap, which now stands at $2.5 trillion, down from $3.7 trillion, according to crypto analyst Symbiote.
In stark contrast, gold has seen an upward trajectory, rising from $2,708 per ounce to $2,916 during the same period, marking a 7.7% increase and reinforcing its reputation as a reliable store of value amid market uncertainties.
Bitcoin’s Price Struggles
Bitcoin’s price has faced a steep decline since Trump’s inauguration. On January 20, 2025, Bitcoin was trading at $106,394, with a market cap of approximately $2.11 trillion based on a supply of 19.8 million coins. By March 4, 2025, the price had fallen to $83,888, reflecting a 21% drop, as noted by TradingView. The broader cryptocurrency market has mirrored this decline, with a total loss of $1.2 trillion in value.
Additionally, Bitcoin ETFs have suffered a $20 billion loss in assets under management, dropping from $120 billion to $100 billion, according to Coinglass. The value of decentralized finance (DeFi) has also taken a hit, with the total locked value falling from $128.7 billion to $93.2 billion, a $35.5 billion decrease, as reported by DefiLlama. These factors have contributed to the substantial drop in the crypto market cap.
Gold’s Steady Climb
Meanwhile, gold has performed steadily, rising from $2,708 per ounce on January 20, 2025, to $2,916 by March 4, 2025, reflecting a 7.7% increase, per TradingView. This growth highlights gold’s continued appeal as a safe-haven asset during times of economic volatility.
What’s Behind the Shift?
The changing dynamics of Bitcoin’s performance raise the question: is Bitcoin losing its status as a hedge? In 2024, Bitcoin was highly correlated with the Nasdaq 100 and S&P 500, tracking these indices 88% of the time, according to Symbiote’s analysis. However, since January 2025, that correlation has dropped to 40%, signaling increased volatility and diminishing confidence in Bitcoin as a hedge.
The resurgence of concerns over trade wars has also played a role in Bitcoin’s decline. A survey by Bank of America, reported by Pensions & Investments on March 4, 2025, revealed that 42% of respondents now view trade wars as the biggest risk to assets in 2025, up from 30% in January. As a result, liquidity is flowing back into the U.S. dollar, putting additional pressure on the crypto market.
Industry Perspectives
Analysts have offered varied opinions on Bitcoin’s future. Symbiote noted on X that the market’s drop since Trump’s presidency began is unexpected, despite his pro-crypto stance. Coinbase CEO Brian Armstrong expressed optimism on X, stating that Bitcoin could serve as “America’s financial lifeline amid soaring debt.”
On the other hand, long-time Bitcoin critic Peter Schiff reiterated his belief that gold remains a superior option, asserting on X that while he understands the idea of Bitcoin as a reserve asset, “gold’s better—I don’t buy it.”
Conclusion
The $1.2 trillion slump in the cryptocurrency market since January 2025 has hit Bitcoin particularly hard, with a 21% decrease in its price. Meanwhile, gold continues to perform well, up 7.7% in the same period. Bitcoin’s waning correlation with the stock market and its struggles amid trade war fears suggest that its role as a hedge is under question. While experts like Armstrong foresee a future for cryptocurrency, for now, gold remains the preferred option for investors seeking stability in uncertain times.
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