The market crashed overnight, gold recovered while Bitcoin did not

Gold recovered in a V shape after Thursday's decline.Not bitcoin.What does this mean for the history of "digital gold"?

Bitcoin fell sharply in the early hours of the Asian session on Friday, losing more than 5% and falling from $89,000 to $83,400 in the US session.Unlike gold and stocks, it has failed to recover - underscoring the troubling identity crisis of what many call "digital gold".

The market is redefining trust in money and institutions.But trust flows to gold coins, not crypto coins.

Same storm, different results.

The sell-off was triggered by escalating tensions between the United States and Iran after President Trump issued warnings at Truth Social, threatening a military strike unless Tehran agrees to a nuclear deal.Middle Eastern governments have been trying to push the two sides into dialogue, but their efforts have so far been fruitless as the US increases its military presence in the region.Furthermore, the prospect of a government shutdown contributes to a climate of risk aversion.

Gold reacted with extreme volatility, falling 7% to $5,250 in one hour, before a spectacular V-shaped recovery. The Kobeissi Letter noted that our gold market capitalization had swung by $5.5 trillion in a single session, the largest single-day move in history. At the start of the Asian session on Friday, spot gold rebounded above $5,400, up about 1%.

Meanwhile, US stocks showed some confidence.The Nasdaq lost just 0.7%, weighed down by Microsoft's 10% decline on concerns over AI use.However, the Meta jumped 10% after solid results, and the Dow closed slightly positive.

Bitcoin told a different story.It fell to $83,400 and recovered only slightly to $84,200, far from the recovery of gold's V-shape or the growth of the tech sector.

Madness in precious metals, but not in Bitcoin

The difference is clear.Gold is up more than 25% this month, nearly double since Trump's second term began last year.Silver has fallen nearly four times since April's "Liberation Day," from just under $30 to more than $118 an ounce.

Analysts say the rally in precious metals is not a short-term fluke: it reflects a weakening of faith in currencies, institutions and the post-Cold War economic order.

Trump's aggressive policies - Penalty tariffs, threats against Greenland and Iran and increased pressure on the federal reserve, including the criminal case against chainman Jerome Pavel - pushed investigation into traditional textile assets in traditional conadement of certain haven assets.The dollar fell the week to a four-year low against a basket of currencies.

Central banks increase gold holdings as a gentle diversion from US Treasuries.Even small investors are coming in in droves, attracted by the safe-haven narrative and modest momentum.

Weak infrastructure

Yet Bitcoin, which shares gold's theoretical appeal as a hedge against currency declines, did not join the buying spree.

The price action exposed the weaknesses that have been accumulating in the crypto markets for a long time.Spot bitcoin ETFs saw steady inflows during January, and total assets fell to $114 billion from a peak of $169 billion in October — a 32 percent drop.

The Coinbase Premium Index, which tracks the price differential between Coinbase and international exchanges and serves as a barometer of US institutional interest, also went negative.Both indicators point to a decline in institutional demand, which drove most of the bull run in 2024-2025.

According to on-chain data, retail demand has plummeted.With institutional and retail in wait-and-see mode, price increases struggled to find momentum and declines became more intense.

On the retail side, CryptoQuant's on-chain data shows small transactions between $0 and $10,000 in steady decline, with 30-day demand growing from over 10% in October to around -6% today.

As both institutional and retail demand weakens, rallies find it difficult to find momentum as the decline becomes more intense.

Wednesday's session was a real-time stress test.Gold then became the preferred safe-haven asset.Today's stock market showed that strong startups can overcome big fears.Bitcoin didn't do this: it took the negative side of the risk without accumulating the benefits of a safe haven.

For the "digital gold" story to regain credibility, Bitcoin will have to show risky behavior at critical times. Until then, the token is more wishful thinking than reality.