Dear Subscriber,

By Jurica Dujmovic

Satoshi Nakamoto created Bitcoin (BTC, “A-”) as a safe haven from the traditional markets.

Thanks to its transparent, trustless nature, Bitcoin became a decentralized beacon of hope that would stand firm while traditional markets crumbled.

And that was the reality for a while.

But 2025 has delivered a plot twist worthy of an M. Night Shyamalan film.

Because while our digital gold still holds its value in broad volatility better than stocks … it has begun to react to that volatility in the near term.

The Trade War Blues: A Familiar Tune in a Different Key

Cast your mind back to 2019.

That’s when President Trump's first trade war sent Bitcoin  from $5,000 to $12,000.

"Digital gold!" we proclaimed, as Bitcoin seemingly proved its mettle against geopolitical uncertainty.

Fast forward to 2025's trade war sequel, and our protagonist has apparently forgotten its lines.

When Trump announced his aggressive new tariffs in April, Bitcoin didn't just decline. It nosedived 25%, tumbling from $100,000 to $75,000 faster than you can say "risk-off."

Meanwhile, gold — the relic we were supposed to be replacing — casually strolled to new all-time highs above $3,400.

Gold’s price year to date. Source: USA Gold. Click here to see full-sized image.

To be fair, Bitcoin tends to quickly reclaim the losses caused by geopolitical crisis, as my colleague Bob Czeschin explained last week.

The data shows that roughly 20 days after an event, BTC is typically at or just below baseline. In some cases, it’s even exceeded its original value.

Not only that, but historically when gold hits a new all-time high … Bitcoin follows in 150 days.

The price of gold surged to a new all-time high on April 17. It was just over a month later that Bitcoin broke to its new all-time high near $111,800.

But the fact that Bitcoin dips on bad news is still telling. It means that big foot investors no longer treat Bitcoin as a true store of value.

Just look at how it performed compared to gold this year.

The yellow metal is up 30% year to date and is approaching $3,450 per ounce. In short, gold has done exactly what it's supposed to do during geopolitical chaos: go up.

Bitcoin, on the other hand, is up only 13% for the year. And while there were wild swings traders could use to squeeze out higher returns, many aren’t able to keep a strong stomach on that roller coaster.

Gold's steady climb versus Bitcoin's manic episodes tells you everything you need to know about which asset institutional investors trust when things get real.

So, what changed?

The Institutional Embrace: A Love Story Gone Wrong

Here's where our tale takes its turn.

Because it’s a reminder that even victories have unintended effects.

When institutional interest in Bitcoin first sparked, we celebrated every headline. Every ETF approval, every corporate treasury allocation, every Wall Street bank opening a crypto desk was another sign of crypto’s growing legitimacy.

And that is still true! But it also means we’ve traded some of Bitcoin’s independence in return.

Bitcoin's correlation with the Nasdaq has reached as high as 0.87. Our once-independent rebel has become just another line item in institutional portfolios, sitting right between Tesla stock and leveraged tech ETFs.

Which means when TradFi risk managers — with limited understanding of the crypto cycles — panic and hit the "sell everything" button during a crisis, Bitcoin gets thrown out with the bathwater … and every other speculative asset.

This is a huge departure from crypto whales, who knew to HODL in times of volatility. And so, the BTC has begun to swing harder on smaller headlines.

The Path Forward: Embracing Reality

What started out as a revolution against the legacy financial system has now morphed into something very different.

But that is the way revolutions go, isn’t it? They rarely end where they begin.

In this case, Bitcoin has lost its true safe-haven status. But it gained something else: a powerful seat at the financial establishment's table.

For investors, this means being more aware of what strategy to target.

For those still seeking refuge from geopolitical storms, the age-old answer remains the best one: Stick to gold.

In fact, this is in-line with what Peter Schiff told the crowd at the recent Bitcoin2025 conference.

Peter Schiff talks up gold on stage at Bitcoin2025. Click here to see full-sized image.

The Euro Pacific Asset Management strategist is famous for building his wealth with gold. And he warned there is no replacement for it in this market.

(To learn more about investing in the tried-and-true safe-haven asset, be sure to read up on my brilliant colleague and precious metals expert Sean Brodrick’s writings.)

As for Bitcoin, it still has a place in your portfolio. But traders may not want to hold through volatile periods anymore.

Rather, they should consider saving it for the risk-on rallies, when central banks are printing and everyone's feeling optimistic.

As for me, I’ll continue to study Bitcoin as it continues its transformation from rebel to risk asset. Because if Bitcoin has shown us one thing, it’s that you never truly know where it’ll end up.

Best,

Jurica Dujmovic