Key Points
- Bitcoin and gold fell amid macroeconomic uncertainty and geopolitical tensions.
- Crypto liquidations surged, heavily impacting leveraged traders and ETF flows.
Investors are increasingly comparing Bitcoin and gold as macroeconomic and geopolitical pressures affect both assets, triggering notable market selloffs.
Gold reached a record high of $5,608 per ounce on Jan. 29, according to Trading Economics data.
After hitting that peak, gold declined by 4.7% within a day to trade near $5,180, despite its market capitalization exceeding $36 trillion.
Macro and Geopolitical Factors Driving Market Moves
Bitcoin entered a downward trend following the US Federal Reserve’s decision to keep interest rates unchanged on Jan. 28.
The cryptocurrency dropped more than 6% in 24 hours, trading near $82,600 during the latest market update.
With no immediate signal of rate cuts, higher-yielding options such as cash and bonds became more attractive, reducing demand for risk-sensitive assets like cryptocurrencies.
Additional pressure came from concerns over proposed US tariffs on the European Union and ongoing geopolitical tensions between the US and Iran, which further discouraged risk-taking.
Market participants are debating whether Bitcoin functions as digital gold, a store of value, or primarily a speculative asset under such conditions.
Liquidations Accelerate Across Crypto Markets
The broader crypto market declined sharply, with total capitalization falling 5.9% in 24 hours to around $2.8 trillion, reflecting a $220 billion selloff.
During the downturn, Bitcoin alone shed approximately $85 billion in market value within four hours on Jan. 29.
Total crypto liquidations surged to $1.71 billion in 24 hours, dominated by long positions, according to Coinglass data.
More than 275,000 traders were affected, with the largest single liquidation linked to a BTC/USDT position valued at $80.5 million on the HTX exchange.
US-based spot Bitcoin exchange-traded funds reported net outflows of $817.9 million, based on SoSoValue data.
Spot Ethereum ETFs also recorded $155.6 million in outflows, while XRP-related investment products saw $92.9 million withdrawn during the same period.
