Bitcoin's 'digital gold' narrative crumbles again as $100,000 odds wilt after Trump's tariff threat

The idea that bitcoin BTC$92,685.82 is a gold-like haven took another hit on Monday. The price tumbled and traders slashed the odds of a sprint to $100,000 price by end-January in after President Donald Trump’s threatened to impose more tariffs on Denmark and seven other European countries.

Trump said Saturday that he would impose a new 10% tax on the countries for opposing his plans to take control of Greenland, an autonomous Danish territory that’s close to North America. In response, the European Union vowed to defend Greenland’s sovereignty, slamming Trump’s threat as hostile to prosperity and free markets.

Against this background, traders slashed the odds of the BTC price rising to $100,000, activity on the decentralized betting platform Polymarket shows. “Yes” shares in the Polymarket contract plunged to 27% from nearly 50% on Friday and 72% on Jan. 15.

Bitcoin dropped close to $92,000 at one point early Monday, CoinDesk data show. The selloff rippled across crypto markets, with CoinDesk indexes for memecoins, metaverse, computing, DeFi and culture and entertainment each dropping over 7%. Asian and European stocks fell, while gold climbed to record highs, a classic flight to safety.

The action underscores bitcoin’s tight correlation with stocks, despite the “digital gold” mantra of some of its cheerleaders.

“Bitcoin has slumped for a fifth consecutive day, retreating from its highest levels since November while struggling to maintain footing above $92,000,” Samer Hasn, a senior market analyst at XS.com, said in an email.

“Bitcoin downtrend is driven by a mix of profit-taking and a ‘risk-off’ pivot as traders digest a sudden spike in U.S. political risk and geopolitical and trade tension,” he said.

On a brighter note, bitcoin and ether spot ETFs drew $1.4 billion and over $500 million last week before the discord erupted, their strongest inflows since October, signaling renewed institutional appetite. That enthusiasm echoes moves of so-called whales, wallet addresses holding large amounts of 1,000-10,000 BTC rising by 28% over the past week, Hasn noted, citing BGeometrics data.

These trends, however, need to continue to bring about a meaningful bounce in the market.

What next?

According to Laser Digital, price action will depend on how the tariffs situation evolves.

“Near-term price action would depend on how this US-EU tariff risk develops. Meanwhile, we have ongoing geopolitical risk lingering in the Middle East, with tension increasing over the weekend,” the firm told CoinDesk in an email.

Additionally, this week’s Davos forum, the U.S. GDP and core personal consumption expenditures data, and an expected Supreme Court decision on the legality of Trump’s tariffs will be closely watched by traders, the firm added.