Trump’s Golden Age: Gold Soars, Bitcoin Falls amid Tariff‑Induced Market Turmoil

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Gold Surges as Bitcoin Falters Under Renewed Trump Administration

Washington D.C. – A year into his second term, Donald Trump’s presidency has overseen a dramatic shift in market dynamics, with Gold experiencing a remarkable surge while Bitcoin struggles to maintain its value. The conversion began following Trump’s Inauguration Day address on January 21, 2025, where he proclaimed a “golden age” for the United States, a prediction that has, surprisingly, materialized in a literal sense for the precious metal.

Gold’s Ascendancy: A Safe Haven in Turbulent Times

Gold prices have soared over the past twelve months, climbing to over $5,100 an ounce—nearly doubling from the $2,638 recorded at the start of Trump’s second inauguration.this significant increase reflects heightened market uncertainty fueled by the Administration’s fluctuating policies, including evolving trade tariffs and geopolitical maneuvers. Investors have flocked to gold as a customary safe haven asset, shielding their portfolios from the volatility.

This trend mirrors ancient patterns: during periods of political and economic instability, Gold typically sees increased demand. According to the World Gold Council, global gold demand reached a record high in 2022, driven by central bank purchases and investor interest, a pattern that appears to be repeating itself now. https://www.worldgoldcouncil.org/

Bitcoin’s Plunge: A Campaign Promise Unfulfilled

Conversely, Bitcoin, a cryptocurrency Trump actively championed during his election campaign, has substantially declined in value. The digital asset has lost approximately 17.6% since Trump resumed office, falling below $90,000 from a high of $106,157 on January 21, 2025. The initial campaign pledge to transform the U.S. into a global cryptocurrency hub now appears increasingly distant.

A Dramatic October Sell-Off

The digital currency experienced a particularly sharp downturn in October, with a single day—Friday the 10th— witnessing a staggering $19 billion wiped from the market.This sell-off was triggered by an initial proclamation of a 100% tariff on Chinese imports, a move later partially reversed, but not before meaningful damage was done. This event underscored Bitcoin’s vulnerability to policy-driven shocks.

Tariffs and Market Reactions: A Year of Volatility

Trump’s early promise of “enormous quantities of money” flowing into the U.S. Treasury from foreign sources was followed by what became known as “Liberation Day” on April 2nd. This policy announcement, however, led to a significant drop in both the S&P 500 and the Nasdaq, and a spike in the VIX, often called the “fear gauge,” reaching 52 points—a dramatic increase from 15.8 on Inauguration Day.

Despite the initial shock, both the S&P 500 and Nasdaq eventually rebounded. The S&P 500 rose from 6,049 to 6,875, while the Nasdaq climbed from 19,756 to 23,224 over a twelve-month period. This growth was largely fueled by strong performance from technology companies, with chief executive officers publicly expressing support for the President.

Asset	Change Since Jan 21, 2025
Gold	+94%
Bitcoin	-17.6%
S&P 500	+13.7%
Nasdaq	+17.6%

Foreign Investment and the Rising Cost of Debt

The tariffs imposed by the Trump administration have also prompted concerns about a slowdown in foreign capital inflows into the U.S. A sentiment of “

Why has gold surged while Bitcoin declined during the Trump tariff‑induced market turmoil?

Trump’s Golden Age: Gold Soars, Bitcoin falls amid Tariff‑Induced Market Turmoil

The re-election of Donald Trump in late 2024 has ushered in a period of meaningful economic recalibration, marked by a renewed focus on protectionist trade policies. The cornerstone of this shift is a series of aggressive tariffs imposed on goods from China, Europe, and Mexico.While intended to bolster domestic manufacturing, these tariffs have triggered substantial market volatility, creating a curious dynamic: a surge in gold prices alongside a decline in bitcoin’s value. This article examines the factors driving this divergence and what it means for investors.

The Tariff Tsunami: A Breakdown

Trump’s latest round of tariffs, implemented throughout 2025, targeted a broad spectrum of imports, ranging from steel and aluminum to consumer electronics and automobiles. The stated goal was to reduce the US trade deficit and incentivize companies to relocate production back to American soil. tho, the immediate effect was a sharp increase in import costs for US businesses.

* Increased Consumer Prices: Businesses largely passed these costs onto consumers, contributing to a higher-than-anticipated inflation rate in the first quarter of 2026.

* Supply Chain Disruptions: The tariffs exacerbated existing supply chain vulnerabilities,leading to delays and shortages of certain goods.

* Retaliatory Measures: Trading partners responded with their own tariffs on US exports,further escalating the trade war and impacting American farmers and manufacturers.

Gold’s Resurgence: A Safe Haven in Troubled Waters

Historically, gold has served as a safe haven asset during times of economic uncertainty and geopolitical instability. The current tariff-induced turmoil is no exception. As stock markets reacted negatively to the escalating trade tensions, investors flocked to gold, driving it’s price to record highs.

the appeal of gold is multifaceted:

1. Inflation Hedge: Gold is often seen as a hedge against inflation, as its value tends to hold steady or even increase during periods of rising prices.
2. Currency Devaluation Protection: Concerns about potential currency devaluation, fueled by the trade war and increased government spending, have also boosted gold’s appeal.
3. Geopolitical Risk: the broader geopolitical landscape, including ongoing conflicts and rising international tensions, further reinforces gold’s safe-haven status.

Data from the World Gold Council shows a 35% increase in gold purchases by central banks in 2025,a clear indication of growing concerns about global economic stability. Investment in gold-backed ETFs also saw a significant uptick, demonstrating strong retail investor demand.

Bitcoin’s Stumble: A Risk-On Asset Under Pressure

in contrast to gold’s ascent,Bitcoin has experienced a notable decline in value since the implementation of the new tariffs. While initially touted as a “digital gold” and a hedge against traditional financial systems, Bitcoin has increasingly behaved like a risk-on asset, closely correlated with stock market performance.

Several factors contribute to Bitcoin’s recent struggles:

* Risk-Off Sentiment: The prevailing risk-off sentiment triggered by the trade war has lead investors to reduce their exposure to volatile assets like Bitcoin.

* Regulatory uncertainty: Increased scrutiny from US regulators regarding cryptocurrency exchanges and stablecoins has added to the negative pressure.

* Profit Taking: Early Bitcoin investors, benefiting from the significant price thankfulness in previous years, have taken the opportunity to cash out during the market downturn.

The correlation between Bitcoin and the Nasdaq Composite has strengthened in recent months, suggesting that Bitcoin is now viewed more as a speculative tech asset than a safe haven.

Historical Parallels: The Smoot-Hawley Tariff Act

The current situation bears striking similarities to the period following the enactment of the Smoot-Hawley Tariff Act in 1930. This protectionist legislation, implemented during the Great Depression, triggered a global trade war and exacerbated the economic crisis.

Like today, the Smoot-Hawley tariffs led to:

* Reduced International Trade: Global trade volumes plummeted as countries retaliated with their own tariffs.

* economic Contraction: The tariffs contributed to a sharp decline in economic activity and increased unemployment.

* Financial Market Volatility: Stock markets experienced significant volatility and a prolonged bear market.

While the current economic context is different,the historical parallels serve as a cautionary tale about the potential consequences of protectionist trade policies.

Impact on Emerging Markets

The tariff situation is disproportionately impacting emerging markets. countries heavily reliant on exports to the US are facing significant economic headwinds.

* Currency Devaluations: Several emerging market currencies have weakened against the US dollar, increasing the cost of imports and fueling inflation.

* Capital Outflows: Investors are pulling capital out of emerging markets, seeking safer havens like the US and gold.

* Slower Economic Growth: The combination of reduced exports, currency devaluations, and capital outflows is slowing economic growth in many emerging market economies.

Navigating the Turbulence: Investor Strategies

Given the current market surroundings, investors are advised to adopt a cautious and diversified approach.

* Increase Gold Allocation: Consider increasing your allocation to gold, either through physical gold, gold ETFs, or gold mining stocks.

* Reduce Risk Exposure: Reduce your exposure to volatile assets like bitcoin and high-growth tech stocks.

* Focus on Value Stocks: Shift your focus to value stocks, which tend to be more resilient during economic downturns.