As 2026 commenced, Bitcoin was trading at approximately $87,600, reflecting a decline of about 6% over the year and a substantial drop of more than 30% from its peak in October. This downturn in what is often referred to as “digital gold” is particularly striking when contrasted with the performance of actual gold, which appreciated by around 63% in dollar terms throughout the year, driven largely by safe-haven demand amid global uncertainties.
The autumn selloff of Bitcoin was largely instigated by the unwinding of highly leveraged positions held by investors. However, a more profound disappointment stemmed from the United States” evolving stance on cryptocurrency. The establishment of America”s Strategic Bitcoin Reserve by former President Donald Trump had raised expectations among investors regarding federal purchases of Bitcoin. These hopes were dashed when it became evident that the reserve would primarily consist of assets seized by law enforcement, rather than an active buying strategy.
In the absence of a concrete plan for a digital dollar, the US effectively legitimized stablecoins pegged to its currency instead. These stablecoins could potentially fill the gap left by the lack of a digital dollar and may even strengthen the US dollar”s position as a global value unit. For instance, dollar-linked tokens that prioritize user anonymity could replicate the characteristics of cash.
This situation raises questions about Bitcoin“s role in the current financial landscape. It still retains its appeal as a hedge against the over-issuance of fiat currency. Nonetheless, in this capacity, it faces stiff competition from gold, a traditional safe-haven asset that requires no technological infrastructure to maintain its value.
