Bitcoin's Risk Asset Behavior Challenges Its 'Digital Gold' Narrative

According to Cointelegraph, Bitcoin is increasingly being viewed as a risk asset rather than a safe haven like gold, challenging its "digital gold" narrative. Analysts suggest that a potential Federal Reserve rate cut in July could boost Bitcoin's prospects, although historical data indicates that the third quarter typically yields flat returns, with a median gain of just 1% from June to September. Despite a lackluster week for Bitcoin, its trajectory could change if it aligns with the global money supply trends. Jurrien Timmer, Director of Global Macro at Fidelity, noted that gold prices might rise following an 8.5% year-on-year increase in the global money supply, driven by geopolitical tensions. However, Bitcoin's volatility presents a contrasting outlook. Timmer highlighted that both gold and Bitcoin are showing rising Sharpe ratios, indicating improved risk-adjusted returns. This metric suggests a potential price recovery, but Bitcoin's dual role as both a store of value and a "Nasdaq proxy" undermines its stability. Market analyst Tony Sycamore echoed this sentiment, stating that Bitcoin trades more like a risk asset akin to U.S. equities rather than a safe-haven asset like gold in 2025. Similarly, Nick Ruck, research director at LVRG, mentioned that Bitcoin's "digital gold" narrative is losing momentum, with traders focusing on short-term volatility instead of viewing Bitcoin as a risk-adjusted asset. The Federal Reserve's decision to maintain interest rates at 4.25%-4.50% since December 2024 has contributed to Bitcoin's struggles this week, reflecting its sensitivity to uncertain monetary policy and global conflicts. However, Fed Governor Christopher Waller indicated in a CNBC interview that a rate cut could occur as early as July, potentially boosting Bitcoin's prospects for a third-quarter rally. Despite this, historical seasonality suggests that any significant rally might not materialize until the fourth quarter. Timothy Peterson, a Bitcoin network economist, noted that over the past decade, Bitcoin's median return from June to September has been only 1% for the entire period. On Friday, Bitcoin experienced a notable retracement after a liquidity grab near the $106,000 level during the London trading session. Technical analysis indicates persistent bearish momentum across various time frames, suggesting a high probability of another liquidity sweep targeting the $102,614 level in the coming days. If selling pressure increases, Bitcoin's price could decline toward the $100,000 threshold, aligning with previous range lows and a key daily fair value gap. This article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making any decisions.