Bitcoin, Gold and Dollar Face Safe Haven Identity Crisis Amid Global Trade War

Key Takeaways

• Bitcoin, once seen as a hedge against market volatility, is increasingly moving in lockstep with traditional equities, especially during downturns.
• Gold and the Japanese yen, both considered safe-haven assets, are facing significant price swings.
• The U.S. dollar remains dominant despite growing concerns over “de-dollarization.”
• The evolving relationships between these assets reflect shifting investor sentiment toward wealth protection.

Amid economic uncertainty and political instability, investors are once again turning to traditional safe-haven assets like gold, the U.S. dollar, and Bitcoin (BTC). However, recent trends suggest that none of them are behaving as expected.

Bitcoin, long touted as “digital gold,” has shown an increasing correlation with traditional equities, challenging its reputation as a hedge against market volatility.

Gold, despite hitting record highs, has become more volatile, while the Japanese yen—a classic refuge in times of crisis—has fallen to multi-decade lows.

Even the U.S. dollar, the world’s reserve currency, faces ongoing speculation about its long-term dominance as trade conflicts reignite debates about de-dollarization.

This evolving situation raises important questions about the future of safe-haven assets and whether Bitcoin will emerge as a modern alternative for protecting wealth during economic uncertainty.

Bitcoin Moves With the Market, Not Against It

Bitcoin has often been pitched as an alternative to traditional financial markets, a hedge against inflation, and a refuge in times of economic turmoil. But recent data tells a different story.

In early March 2025, U.S. stocks tumbled as concerns over a potential recession deepened. The S&P 500 and Nasdaq posted sharp declines, fueled in part by President Donald Trump’s remarks warning of economic headwinds.

Bitcoin followed suit. BTC plunged more than 6% in 24 hours, mirroring losses in equities. It was not an isolated incident—historical data shows a clear trend of Bitcoin moving in tandem with risk assets.

Historical data further supports this trend. In 2022, Bitcoin experienced a 59% decline, closely mirroring the broader stock market downturn.

As of 2025, Bitcoin’s price movements remain closely aligned with major indices like the Nasdaq. Rather than acting as a counterweight to financial turbulence, Bitcoin increasingly behaves like a high-risk tech stock.

This growing correlation casts doubt on the idea that Bitcoin is a reliable safe haven, at least in the short term.

Gold and Yen No Longer Feel Safe

Despite surging past $3,000 per ounce multiple times in early 2025, gold has become increasingly volatile, swinging up and down as investors react to global trade tensions.

Analysts still predict gold could stabilize above $3,000, driven by persistent inflation fears and economic uncertainty.

Meanwhile, the Japanese yen—historically a safe-haven currency—has been in steady decline. Since 2020, it has depreciated from 108 per U.S. dollar to over 150, marking its weakest level in decades.

This is driven by Japan’s low-interest-rate policies, the Bank of Japan’s aggressive monetary easing, and the U.S. Federal Reserve’s interest rate hikes.

Additionally, Japan’s ultra-low interest rates and trade deficit, worsened by rising energy prices, have made the yen less attractive to investors.

Despite occasional government interventions, its weakness has persisted through 2024 and into 2025.

Meanwhile, U.S. Treasury yields have also fluctuated as investors react to economic instability and trade conflicts.

The 10-year Treasury yield has recently dipped, reflecting rising demand for these government securities as a safe bet during uncertain times.

The U.S. Dollar: Still King, but for How Long?

For decades, the U.S. dollar has been the ultimate safe-haven asset. But with renewed trade conflicts and talk of de-dollarization gaining momentum, its future is under scrutiny.

Countries facing U.S. tariffs have begun exploring alternatives, bringing discussions about reducing reliance on the dollar back to the forefront.

Despite this, the dollar remains dominant in global markets. It accounts for roughly 60% of global reserves, down from 67% in 2004 but far ahead of any competitor.

While China’s yuan and the euro have gained traction in global trade, no other currency matches the dollar’s depth, liquidity, or safety.

As of December 2024, non-dollar transactions, like those in the Chinese yuan, remain small. They account for less than 4% of global trade.

U.S. Treasury securities continue to be highly sought after, with foreign holdings exceeding $7 trillion. Demand for the U.S. dollar remains strong. It is driven by high U.S. interest rates, capital inflows, and its perceived status as a safe-haven asset.

According to Charles Schwab , the dollar remains solid in the short term. This is due to strong U.S. economic growth and higher interest rates.

Some modest weakening could occur if trade conflicts ease, but a long-term decline remains unlikely.

The Future of Safe Havens