Bitcoin (BTC) and crypto markets have experienced a week of high tension, marked by volatility that flared up after President Donald Trump’s announcement on TruthSocial last Friday.
The announcement that large-scale tariffs could be imposed on Chinese products sent shockwaves through not only traditional exchanges but also the Bitcoin market. digital currency Within hours, the price plummeted from nearly $126,000 to a low of around $102,000..
This decline was severe and created a domino effect for leveraged traders. As reported by CriptoNoticias, Friday October 10th ended with one of the largest liquidations in recent history, according to market data.
But the storm subsided as quickly as it came. Earlier this week, a more conciliatory tone from the US administration soothed investors.
The mere suggestion that tensions might begin to ease was enough. Bitcoin will begin a notable recoveryrising above the $115,000 mark, showing resilience that surprised many.
The dual narrative that defines Bitcoin
Analysis is essential to understand why Bitcoin reacted the way it did, initially falling sharply and then recovering violently. Two competing major narratives To define an identity in an investor’s portfolio.
However, a large portion of the market still perceives: Bitcoin as a risk asset. From this perspective, digital currencies are similar to stocks in technology companies or emerging markets.
These are assets that tend to grow in environments of economic stability and optimism, but suffer major corrections when fear and uncertainty dominate the market.
When the threat of a trade war arises, as it did last Friday, the instinctive reaction of many investors is to reduce their risk exposure and seek refuge in more stable and liquid assets such as the US dollar. This “escape” explains the initial decline that affected Bitcoin.
Julián Colombo, general director of Bitso Argentina, explained in a statement shared with CriptoNoticias: “The decline in Bitcoin and other digital assets is undoubtedly explained by the announcement by the United States of the creation of trade tariffs on Chinese products. Since then, a decline has started to be recorded in the prices of all, or even most, assets.”
Meanwhile, the following narrative is growing and becoming more and more certain. Positioning Bitcoin as a store of value or “digital gold”. Defenders of the theory rely on its fundamental characteristics: a finite and predictable supply of 21 million units, a decentralized nature that resists censorship and manipulation by governments and central banks, and portability across borders.
From this perspective, Bitcoin is not an asset for short-term speculation, but rather a haven for long-term assets against fiat devaluation and geopolitical instability.
Bitcoin is still in the early stages of adoption
The question that arises is, if Bitcoin is “digital gold,” why does its price plummet during times of market panic, a scenario in which the store of value is supposed to shine?
This is answered by considering the maturity of the market and the implementation stage in which the assets reside.
The story of Bitcoin as a store of value is not yet well established in the consciousness of all investors worldwide. In recent years, it has gained tremendous momentum with the entry of major institutions and exchange-traded funds (ETFs), but its history is short compared to gold’s thousands of years.
During severe and unexpected crises, the learned behavior of most market participants is to liquidate the most volatile assets in order to obtain cash. In this context, the “risk asset” characteristics of Bitcoin are temporarily imposed.
However, what sets Bitcoin apart from other speculative assets is the speed of its recovery.
The rapid push buying by investors with long-term beliefs shows that the “digital gold” theory is acting as strong support. Whenever prices fall due to exogenous factors, some buyers interpret the decline as weakness rather than weakness. like a chance Accumulate assets at a discount.
The path to the consolidation of Bitcoin as a store of value
In the long term, there is a solid argument to think that Bitcoin’s “risk asset” properties will become less important compared to its role as a store of value. There are several factors contributing to this transition.
The first one is yours. lack of planning. In a world where central banks respond to crises with unprecedented financial expansion, assets whose supply is mathematically constant are becoming increasingly attractive. Bitcoin’s main strength is monetary policy.
The second is growth. institutional recognition. The approval of Spot Bitcoin ETFs in the US opens the door to large capital flows from institutional investors, who by their nature tend to invest over longer time horizons. These big players aren’t afraid of weekend swings. They invest in Bitcoin based on its macroeconomic potential over the next 10 years.
In this sense, Colombo adds an outlook to the future.
Beyond the recent correction, we believe that Bitcoin’s bullish trend in the medium to long term remains intact. In addition to planned shortages, increasing institutional awareness continues to strengthen its position as a safe-haven asset. Incorporating BTC into funds and corporate portfolios has greatly contributed to legitimizing BTC as a store of value.
Julián Colombo, General Director of Bitzo Argentina;
In conclusion, the recent episode of volatility related to US-China tariffs has become a masterpiece of Bitcoin’s current character in the global market.
As a risk asset, Bitcoin acts as a seismometer that reacts to macroeconomic fluctuations, but it is supported by a strong base of investors who understand Bitcoin as a 21st century store of value.
As its adoption expands and its role strengthens, Its behavior in the face of future crises is likely to increasingly resemble that of gold. And less than a technical act.
