Despite a record-breaking year for the stock market in 2025, global investors entered the new year with much more concern for the prospects of growth. The questions of stretched AI valuation in the US, rising geopolitical tensions, and now mixed reviews of the new Fed Chair created a perfect storm, and then AI startup Anthropic triggered sharp sell-offs when investors expected the future of corporate America would no longer look the same again.
It was estimated that more than $600 billion was wiped out in market value in the week of February 2nd. The week’s volatility also drove Bitcoin edge after edge. Many in the past who saw Bitcoin as digital gold were left confused and started to realize that Bitcoin is not gold. The so-called AI scare trade continues to dominate the market, despite encouraging signs from AI leaders such as Nvidia on their recent earnings.
To muddy the macro backdrop even further, the Middle East tension risks pushed oil prices to new highs that ultimately could drive up inflation and dampen the prospect of a Fed rate cut. The verdict is not yet out for the debate around whether Bitcoin will act like gold in times of geopolitical tensions, but there are a few signs investors should follow before we see the conclusion.
Different risk profile
While gold and Bitcoin both serve as stores of value, they hold vastly different risk profiles. Gold remains an anchor in institutional portfolios as a defensive play during market turbulence. Despite being known as “digital gold”, Bitcoin behaves more like a high-beta tech stock. It correlates with Nasdaq moves, surges on risk-on sentiment, and falls during liquidity crunches. As the conflict in the Middle East continues, CoinEx’s Chief Analyst Jeff Ko wrote in the February 2026 CoinEx monthly report about the different market reactions of gold and Bitcoin.
“The jump in oil and gold prices reflects a temporary risk premium. When oil and gold retreat from these gains, the market will be signaling expectations of de-escalation. If the conflict intensifies, we can expect gold to remain strong while Bitcoin becomes more vulnerable, particularly if supply shocks tighten liquidity and raise real yields,” said Ko.
For now, Bitcoin sits in the risk asset category for investors seeking asymmetric upside rather than stability. That upside potential is where Bitcoin’s narrative diverges most sharply from gold’s ceiling. Gold’s market cap at around $33 trillion leaves limited room for risk-off growth after falling around 20 percent from its recent all-time high. However, Bitcoin has structural headroom at roughly $1.5 trillion while in the midst of an institutional market shift.
Additionally, the AI revolution adds another forward-looking perspective where blockchain infrastructure powers decentralized compute networks, tokenized datasets, and autonomous agent economies. Gold can’t participate in this technological shift, while Bitcoin and other cryptocurrencies can trade 24/7. On the other hand, Bitcoin can be integrated into the architecture of machine-driven finance. This positions digital gold not just as an inflation hedge but as a growth play on the largest development to the internet in decades.
Shared bonds
The narrative and fundamental appeal behind Bitcoin and gold are the same: they both offer a fixed supply when global currencies are increasingly inflating away their underlying value. Gold has established geological scarcity, continuous demand for industrial use, and a global cultural value that won’t disappear any time soon. Bitcoin’s 21 million supply cap is enforced by a decentralized system. Neither can be debased by central banks, a vital quality as dollar dynamics shift.
The dollar debasement trade now has multiple triggers. Japan’s yen interventions expose currency war risks. Tariff threats from major economies signal fragmentation of global trade flows. Geopolitical tensions push nations toward non-dollar reserves. Both gold and Bitcoin benefit as investors hedge against fiat instability. Treasury yields matter less when the underlying currency’s purchasing power erodes.
This shared immunity to monetary expansion explains why both assets attract similar investor psychology during sovereign debt concerns. When fiscal discipline vanishes and money supply charts go vertical, hard assets with provable scarcity become the natural refuge, whether that scarcity comes from mining or cryptographic mining. For the outlook of Bitcoin this year, a few key developments are worthy to follow.
Looking ahead
We are still very early in the year, and looking at the market, we remain optimistic. The macroeconomic headwinds that clouded the opening months are real, but they do not fundamentally alter the structural tailwinds building beneath the surface. Regulatory progress, institutional adoption, and the expanding utility of blockchain infrastructure are compounding quietly in the background, and history suggests that Bitcoin’s most decisive moves often emerge from periods of maximum uncertainty. The catalysts taking shape across policy, finance, and technology point toward a maturing asset class that is increasingly difficult for the mainstream to ignore.
Improvement in regulatory environment
The long-standing regulatory uncertainty that limited institutional Bitcoin adoption is steadily lifting as more jurisdictions pass initiatives that enable corporate usage of crypto. Spot Bitcoin ETFs now pull in billions monthly, giving traditional finance a compliant on-ramp that didn’t exist years ago. More critically, the shift from enforcement-by-lawsuit toward clear frameworks changes the game to enable risk-averse institutions to participate and develop blockchain innovations. When pension funds and sovereign wealth managers can allocate without career risk, capital flows transform. Europe’s MiCA regulation and U.S. guidance around custody and classification remove the compliance barriers that kept trillions sidelined. Regulations onboard institutions to further push the crypto industry and its extensions into the mainstream and enable everyday use cases.
Tokenization
Real-world asset tokenization creates an unexpected tailwind for crypto infrastructure. As billions in bonds, real estate, and institutional funds migrate onto blockchain rails, the underlying settlement networks gain legitimacy and liquidity depth. Digital assets become integrated into traditional finance workflows rather than sitting in isolated silos.
Commodities, government debt, and treasuries make up a large portion of the $300+ billion US dollars in distributed asset value, while stocks quickly climb in transaction volume, according to rwa.xyz. Tokenized treasuries now offer yield within DeFi protocols, while major financial institutions pilot blockchain-based settlement for everything from carbon credits to trade finance. As tokenized traditional assets prove blockchain’s utility for institutional operations, the entire crypto ecosystem benefits from increased infrastructure investment, regulatory clarity by association, and capital inflows that lift the sector’s credibility.
With contributions from Nick Ruck, Director at LVRG Research.
Yiwei Wang is a passionate blockchain enthusiast who aims to create interesting storytelling at the intersection of crypto, economics, and public policy. He navigated the complex landscape of the blockchain industry with effective financial communications and has worked with various industry leaders and companies.
LVRG Research serves as the research and analysis division of LVRG PR. It delivers data-driven insights on market trends, macroeconomic developments, and industry shifts, with its frequent media presence underscoring its reputation as a trusted source for timely and thought-provoking narratives.
By combining deep industry expertise with tailored solutions, ranging from PR and marketing strategy to analytical research, LVRG Research assists clients in strengthening their visibility across both Web3 and mainstream markets.
TNGlobal INSIDER publishes contributions relevant to entrepreneurship and innovation. You may submit your own original or published contributions subject to editorial discretion.