Gold surged to a new all-time high of $4,690 per ounce while Bitcoin dropped below $93,000 as investors fled risk assets following President Donald Trump's announcement of tariffs on eight European nations tied to his administration's push to acquire Greenland.
What Happened: Tariffs Spark Market Divergence
Trump announced 10% tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland on Jan. 17, with duties set to rise to 25% on June 1.
The measures will remain in effect until the United States secures an agreement to purchase Greenland.
Representatives from the affected countries held emergency talks on Sunday, with European Commission President Ursula von der Leyen and European Council President António Costa issuing a joint statement declaring the European Union "stands in full solidarity" with Denmark and the people of Greenland.
CNN reported the EU is considering a countermeasure package that could include tariffs worth up to €93 billion ($107.71 billion) or restrict U.S. companies from accessing the bloc's market. BTC fell to $92,574 at the time of writing, down 2.67% over 24 hours, while total cryptocurrency market capitalization dropped by nearly $98 billion.
The selloff triggered $864.35 million in liquidations across the crypto market, with long positions accounting for more than $780 million.
"Bitcoin falls nearly -$4,000 as $500 million worth of levered longs are liquidated in 60 minutes," The Kobeissi Letter wrote.
Also Read: Dash Retreats From $96 Peak As Short Sellers Gain Upper Hand
Why It Matters: Safe Haven Debate Reignited
The divergence between gold and Bitcoin has renewed questions about the cryptocurrency's role as a store of value during periods of geopolitical stress.
Analyst Timothy Peterson noted that despite Bitcoin's 24/7 trading, the price did not react for about 36 hours after Trump's announcement. "This illustrates how most intraday 'news' about price movements is usually an irrelevant storyline told after the fact," he wrote.
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, suggested the Bitcoin-to-gold ratio is more likely to continue declining toward 10x rather than rebounding toward 30x in Bitcoin's favor.
Economist Peter Schiff was more direct.
"Everyone expects Bitcoin to follow gold's lead and rally to new highs. But the market has given speculators way too much time to buy," he said. "What's far more likely is that Bitcoin's failure to match gold's gains undermines its narrative as digital gold, resulting in a spectacular crash."
Veteran trader Peter Brandt predicted U.S. dollar-denominated assets would lose value to physical commodities, though he expressed uncertainty about Bitcoin's role in that shift.
"Altcoins will become more worthless than USDs," he added.
Read Next: What Happens After XRP Reaches $2.28? Elliott Wave Analysis Signals Trouble