The recent global sell-off in financial markets, triggered by the new tariffs imposed by the Trump administration, has raised concerns among investors, particularly those involved in cryptocurrencies. Many market observers are now bearish on Bitcoin (CRYPTO: BTC), believing that it may suffer due to a combination of factors, including diminishing economic growth, rising inflation, and an overall sense of market uncertainty that has gripped investors lately.

However, one must question whether this bearish outlook is a result of overreactions from investors. As many crypto enthusiasts are quick to remind us, Bitcoin itself is not subject to tariffs, which raises an intriguing point about its resilience in the face of economic challenges. To gauge Bitcoin's potential trajectory, especially considering that it has fallen nearly 30% from its all-time high of $109,000 set in January, it is essential to explore three fundamental questions regarding its future.

Is Bitcoin still a safe-haven asset?

Throughout its relatively short history, Bitcoin has frequently been dubbed 'digital gold' due to its share of characteristics with traditional precious metals. One notable aspect is its limited supply; Bitcoin is capped at a total of 21 million coins, with nearly 20 million of these already in circulation. This scarcity is fundamental to Bitcoin's appeal, as it means that approximately 95% of all Bitcoin that will ever exist is already in circulation.

Moreover, Bitcoin's design incorporates an algorithmic mechanism known as 'halving,' which reduces the mining reward for new coins by half every four years, contributing to its disinflationary nature. The imagery often associated with Bitcoin — a shiny, gold-like coin — reinforces its perception as a stable investment, akin to that of gold.

Nevertheless, the question remains: is Bitcoin truly a safe asset? During the tumultuous stock market decline of 2022, Bitcoin's performance did not reflect this notion. While the S&P 500 index fell by 18%, Bitcoin's value plummeted by a staggering 64%. In stark contrast, gold managed to maintain its value, increasing by a modest 0.4% during the same timeframe.

In early 2023, however, Bitcoin demonstrated its potential to act as a safe haven during a crisis involving regional banks. Investors sought refuge in Bitcoin amid fears for the stability of traditional banking institutions, believing it to be a safer alternative for their funds than traditional banks. This shift in investor sentiment highlights the ongoing debate about Bitcoin's role in the financial ecosystem.

The year 2025 is shaping up to be a crucial test for Bitcoin's credibility as a store of value. With gold prices surpassing the $3,000 mark this year and Bitcoin seeing a nearly 30% drop from its peak, the contrasting paths of these two assets prompt a pivotal question: if investors continue to favor gold over Bitcoin, could the long-standing theories of Bitcoin as a store of value and 'digital gold' be proven incorrect?

Is Bitcoin merely an expensive tech stock?

This brings us to the most pressing concern for investors: Bitcoin's growing correlation with volatile technology stocks. Historically, Bitcoin maintained a unique position, largely unaffected by fluctuations in major asset classes, including tech stocks. This distinct characteristic is now appearing to change, causing anxiety among those who view Bitcoin as a hedge against market instability.

As the financial landscape continues to evolve, and with significant market shifts occurring, the potential future of Bitcoin remains uncertain. Investors will need to closely monitor both macroeconomic conditions and Bitcoin's behavior in relation to other asset classes as they navigate this complex landscape.