The "Digital Gold" narrative is gradually collapsing! Bitcoin drops below $63,000, and "tactical de-risking" is sweeping through the crypto market.

Dow Jones Financial APP learned that during Tuesday’s Asian trading session, risk appetite in the financial markets continued to decline. The world’s largest market cap cryptocurrency—Bitcoin—once plummeted over 5% and fell below $63,000, mainly due to investors continuing to grapple with escalating global trade tensions and broader geopolitical risks under the new round of tariffs led by Trump.

Meanwhile, the sharp decline in Bitcoin’s price also highlights that when markets face uncertainties like tariffs and geopolitical issues, funds tend to flow more into traditional safe-haven assets (especially gold and silver) rather than “digital gold” assets like Bitcoin. The entire crypto market’s risk asset pricing relies more on bullish beliefs and narrative logic within the crypto space rather than traditional cash flow fundamentals. Therefore, when the optimistic narrative of “digital gold” Bitcoin is fully challenged, it signals a continued collapse of marginal buying power for cryptocurrencies like Bitcoin.

Under the heavy pressure of collective sell-offs by investors, global funds shifted towards a “risk-off” strategy, causing this largest market cap cryptocurrency to drop to $62,964.64 on Tuesday.

On Tuesday, Bitcoin plunged over 5%, finally breaking the $63,000 level. A senior Wall Street analyst said that after the U.S. Supreme Court recently ruled that Trump’s tariffs were illegal and Trump quickly proposed other tariff frameworks, combined with geopolitical turmoil, market risk appetite sharply declined. This decline reflects a “tactical risk reduction,” as escalating tariff tensions and broader geopolitical risks continue to pressure risk assets like cryptocurrencies.

Macro Risk Appetite Reset

Some analysts suggest that Bitcoin’s recent sharp decline resembles a “macro risk appetite reset” rather than a single crypto-specific negative event.

Looking at Bitcoin’s weak performance since February, it has been highly sensitive to “tightening financial conditions” during risk event clusters. Repeated tariff policies from the Trump administration, along with legal ambiguities and uncertainties, have increased global risk premiums. The market has exhibited a typical risk-off pattern (selling off cryptocurrencies and high-valuation tech stocks, while traditional safe havens like gold strengthen), with Bitcoin acting more like a high-beta risk asset rather than a safe haven. Similar narratives of “tariff uncertainty suppressing risk appetite and funds flowing into gold” are prevalent in mainstream media and research commentary.

Christopher Hamilton, head of client investment solutions for Invesco in Asia Pacific (excluding Japan), said, “Bitcoin’s sharp decline doesn’t seem like a typical crypto-specific sell-off but more like a classic risk sentiment or macro risk appetite reset.”

Senior analyst Hamilton added that this plunge is more likely reflecting a “tactical risk-off trend” rather than a structural exit of investor positions.

Last week, U.S. President Donald Trump said he would decide within “about 10 days” whether to launch military strikes against Iran, citing Iran’s possible resistance to a new nuclear deal. Subsequently, U.S.-Iran geopolitical tensions intensified, with Washington continuing to deploy military assets in the Middle East. Coupled with the Supreme Court’s ruling invalidating tariffs and Trump’s inconsistent tariff policies, market re-pricing has become more evident, making the “macro risk appetite reset” trend increasingly clear.

Since surpassing $125,000 in October last year to reach a record high, Bitcoin experienced a sharp sell-off, and this downward trend has continued into the new year. Year-to-date, this largest market cap cryptocurrency has fallen by 27%, and from its October peak, it has dropped approximately 50%.

Billy Leung, a strategist at Global X Australia, said, “More importantly, Bitcoin remains highly sensitive to global liquidity conditions. If the market interprets Trump’s new trade policies as tightening financial conditions, crypto assets will be among the first to experience negative sell-offs.”

Key Narratives That Once Supported Bitcoin’s Bull Market Are Being Simultaneously Weakened

Bitcoin appears to be undergoing a “narrative compression” crisis—its price retreat is not the only issue; more critically, the long-term pillars of its value—its main narratives (hedge, payment, speculation)—are being weakened simultaneously. Ironically, this occurs during a phase when Bitcoin seemed to have “won”: with more friendly regulation, deeper institutional participation, and more sophisticated Wall Street tools (like spot ETFs), yet these developments haven’t prevented its market cap from shrinking significantly. Instead, they prompt markets to ask: when upward movement is no longer the default, what can attract new funds and long-term allocations?

From the current market re-pricing trend, Bitcoin, dubbed “digital gold,” has been thoroughly outperformed by traditional safe-haven gold under macro risk pressure. When risk aversion rises, funds prefer to flow into gold-related safe assets rather than the highly volatile Bitcoin (recent outflows from spot Bitcoin ETFs are a typical example).

For Bitcoin, the once-proud “future of payments” narrative is being more directly diverted by stablecoins and tokenized settlement, as stablecoins offer better explainability and compliance in payment scenarios—some payment platforms are adopting stablecoins or Lightning Network solutions, signaling that the “payment battlefield has shifted.” Additionally, “speculative attention” is spilling over into faster settlement and event-driven prediction markets like Polymarket and Kalshi, which attract high-frequency speculative funds and public attention, creating an alternative to the crypto speculation ecosystem.

Therefore, the “narrative drift” risk makes a strong short-term rebound for Bitcoin more difficult. If the market simultaneously re-evaluates long-term support for Bitcoin’s bull case—such as its effectiveness as a safe-haven/inflation hedge, its necessity as a payment medium (with stablecoins being closer to “payments”), and its monopoly on speculative attention (with some funds shifting to prediction markets)—then even without “fatal negative news,” assets may still remain, payment networks continue to operate, but the “narrative that attracts incremental funds” weakens significantly. Rebounds would then depend more on macro liquidity easing or risk appetite recovery rather than accelerated narrative-driven growth.

To reverse Bitcoin’s current weakness, at least one variable needs to turn: clearer tariff policy pathways, easing geopolitical risks, a marginal loosening of dollar liquidity or a renewed rate cut expectation, or a de-leveraged “volatility decline + capital inflow” near key support levels. This is why markets are very concerned that breaking below the critical $60,000 level could trigger a new wave of liquidations.

Standard Chartered, often called the “flag bearer of Bitcoin bull markets,” recently warned that Bitcoin could weaken further and significantly cut its 2026 year-end target price. Geoffrey Kendrick, head of global digital asset research at Standard Chartered, stated in a report: “We expect further sharp capitulation-driven sell-offs in the coming months.” He particularly pointed out that continuous outflows from ETFs and the weakening macroeconomic and market risk appetite in the U.S. are contributing factors.

Standard Chartered, which has been dubbed the “flag bearer of Bitcoin bull markets,” accurately predicted Bitcoin’s unprecedented bull run at the end of 2023. However, its latest research shows a more cautious stance, with the bank lowering its 2026 year-end Bitcoin price forecast from $150,000 to $100,000—down from a previous estimate of $300,000 just months ago—and warning that the world’s largest market cap cryptocurrency could even plunge to $50,000 before stabilizing.