Gold Plummets: Background and Causes
In March 2026, global financial markets experienced a remarkable event: spot gold fell by a cumulative 10.52% over the course of a week, while COMEX gold futures dropped by 11.07% during the same period, marking the largest single-week decline since 1983.This sharp decline was not caused by a single factor but was the result of a combination of macroeconomic factors and market sentiment.
- The Safe-Haven Logic Temporarily Failed: Against the backdrop of a global liquidity crisis and expectations of a short-term shift in monetary policy, gold’s appeal as a traditional safe-haven asset was undermined.
- The situation in the Middle East and expectations of interest rate cuts: The ongoing escalation of hostilities in the Middle East has driven up energy prices, thereby dampening market expectations of a Federal Reserve rate cut; some analysts even believe the probability of a rate hike has risen to 50%, which typically weighs on gold, a non-interest-bearing asset.
- Technical Factors and Profit-Taking: The triggering of technical stop-loss orders, the unwinding of previous profit-taking positions, and liquidity-driven liquidations collectively accelerated the downtrend.
- Capital Outflows: Passive selling triggered by the stock market decline also spilled over into the gold market. At the same time, a slowdown in central bank gold purchases and continued outflows from gold ETFs further intensified downward pressure.
- Historical Concerns: Market concerns that the historic crash of March 1983—triggered by massive gold sales by Middle Eastern oil-producing nations to “raise funds”—might repeat further dampened investor sentiment.
During this period, the price of gold had reached a historic high of nearly $5,600 per ounce in late January 2026, but by March 20, it had fallen below $4,500 per ounce and broke through the $4,000 mark in July.
Bitcoin Controversy Over Its Safe-Haven Attributes During the Same Period
Amid the sharp fluctuations in gold prices, the performance of Bitcoin and discussions regarding its safe-haven status have once again come into focus. As of this writing (July 2026), Bitcoin has stabilized above $60,000, though it briefly fell below that level during the second quarter of 2026.
Arguments Supporting Bitcoin’s Safe-Haven Status
- “Emerging Global Currency Alternative”: Institutions such as BlackRock (BlackRock) believe that Bitcoin—which is scarce, global, decentralized, and non-sovereign, and carries no specific country risk or counterparty risk—should not be simply viewed as a “risk-on” asset. Robbie Mitchnick, Head of Digital Assets at BlackRock, noted that Bitcoin has a low long-term average correlation with risk assets.
- Outstanding Performance During Crises: According to data from Bitcoin, a financial services firm, Bitcoin has outperformed other assets—including the S&P 500 and gold—during the past seven financial market crises, consistently delivering the highest 60-day returns during each crisis.
- Long-Term Store of Value: Anthony J. Pompliano, founder and CEO of Professional Capital Management, believes that Bitcoin has become the “king of safe-haven assets,” with an extremely low probability of incurring losses over the long term. Dr. Xi Chunyin of Huxiu also argues that Bitcoin is a de-sovereign credit asset in the digital age, competing alongside gold for the role of a store of value amid the global restructuring of credit.
- Institutional Adoption and Future Potential: Cathie Wood, CEO of ARK Invest, has predicted that as volatility declines year by year and institutional adoption accelerates, the price of Bitcoin could rise significantly by 2030.
Views Questioning or Doubting Bitcoin’s Unproven Safe-Haven Status
- High Correlation with Risk Assets: Many analysts point out that Bitcoin’s price movements are highly correlated with risk assets such as the S&P 500 Index. For example, during the 2020 pandemic, Bitcoin plummeted in tandem with U.S. stocks, which contradicts the definition of a safe-haven asset.
- Lack of a Value Anchor: Some argue that Bitcoin’s greatest flaw is the absence of a widely recognized value anchor and a convincing pricing model, resulting in extremely high price volatility.
- The “ATM” Effect: Media outlets such as Wall Street Journal have pointed out that when market panic strikes, Bitcoin—due to its 24-hour trading, deep liquidity, and instant settlement—actually becomes an “ATM” that investors turn to first to raise cash.Greg Cipolaro, Global Head of Research at NYDIG, also believes that during times of stress, the characteristics of Bitcoins can become a “weakness,” leading to reflexive selling during deleveraging.
- Has Not Experienced a Full Economic Cycle: Moomoo (US Stocks 101) points out that since its inception in 2009, Bitcoin has not yet experienced a full economic recession cycle, and its performance amid economic uncertainty still requires more time to be validated.
- Volatility and Yield Characteristics: Binance researchers believe that Bitcoin has limited price correlation with gold during major economic events, and their performance often diverges. Bitcoin is better suited for allocation during periods of ample liquidity and rising risk appetite; it is a growth asset with stronger yield characteristics rather than an anti-inflationary safe-haven asset.
Comparison of Supply and Market Capitalization Between Gold and Bitcoin
As of July 2026, the global market capitalization of gold is estimated to be between $28.34 trillion and $28.98 trillion, while that of Bitcoin is approximately $1.278 trillion to $1.31 trillion.In terms of supply, gold is a relatively rare precious metal on Earth; over 200,000 metric tons have been mined, with proven reserves of approximately 60,000 metric tons, and it can be recycled. Bitcoin has a fixed supply cap of 21 million coins, which is expected to be fully mined by approximately 2140, and undergoes a halving event every four years, making its scarcity one of its core value propositions.
Conclusion
Gold’s significant decline in March 2026 undoubtedly challenged the traditional perception of it as the ultimate safe-haven asset.At the same time, the safe-haven attributes of Bitcoin, as an emerging digital asset, remain the subject of intense debate. Although supporters argue that its scarcity and decentralized nature make it “digital gold,” its high volatility and correlation with risky assets during periods of market panic and liquidity crunch also raise questions about its suitability.To date, whether Bitcoin can fully take over gold’s safe-haven attributes remains an open question with no definitive answer, and the market will continue to closely monitor its future performance.
