Bitcoin Slides to $105K as Gold Surges in Safe Haven Shift

Bitcoin experienced a sharp decline this week, falling over 5% to $105,105 by Friday, marking a drop of roughly 13% from its October 6 peak of nearly $126,000.

The plunge was fueled by heavy liquidations in the crypto market, intensifying selling pressure as traders moved away from riskier assets.

Crypto Liquidations Drive Bitcoin Down, Gold Hits New Heights

Market data reveals approximately $1.23 billion worth of crypto derivatives were liquidated within 24 hours, with Bitcoin accounting for $453 million and Ethereum $277 million.

Meanwhile, gold defied the trend by climbing to record levels, pushing spot gold prices above $4,300 an ounce and futures nearing $4,329.

This surge reflects a broad rotation into traditional safe havens as investors grapple with rising economic and geopolitical risks.

Gold exchange-traded funds (ETFs) saw substantial inflows, some reaching long-term highs, while Bitcoin ETFs experienced net outflows midweek.

This divergence underlines a clear preference for liquidity and safety during market stress, exposing Bitcoin's heightened volatility compared to gold’s stability.

“Digital Gold” Debate Resurfaces Amid Market Stress

The week’s market moves reignited debate about Bitcoin’s reputation as “digital gold.”

Critics highlight Bitcoin’s significant volatility and its correlation with other high-risk assets during selloffs, challenging its status as a safe haven.

Yet, some investors view Bitcoin as a valuable investment vehicle, acknowledging its growth potential despite its failure to consistently hedge against crises like gold does.

Investor focus now shifts to Federal Reserve signals and banking sector developments, looking for clues on future monetary policy.

Should rate cut expectations materialize, gold’s upward momentum may continue. Conversely, a return of risk appetite could reverse some money flows back into cryptocurrencies.

For now, the market shows a clear preference: a significant portion of capital has chosen established safety in gold over the unsteady terrain of cryptocurrencies as markets digest recent losses.