What this chart shows
The chart shows an indexed price level of both Bitcoin and Gold year to date. Bitcoin traded at a high of almost 100,000 USD on the 14th of January and subsequently fell sharply (17% in 24 hours) to around 60,000 USD on the 5th of February. This is after a plummet from its peak of 126,000 USD in October 2025, when the FCA lifted long-standing bans on retail investors holdings crypto ETPs. Similarly, Gold experienced a crash from its peak of almost 5,600 USD on the 29th of January to 4,400 USD on the 2nd of February.
Why this is important
Bitcoin is often referred to as “Digital Gold” by the cryptocurrency industry, due to some attributes it shares with the precious metal: it has a limited supply, it is durable and it is portable. The main difference cited by investors is that Gold has “intrinsic value”. Its use in jewellery has been going on for millennia and today we use it across many industries (e.g. electronics). This is particularly critical when thinking about the price floor of these two investments.
The crash in gold prices, after the nomination of Walsh to be the new Fed Chair, was followed by a rapid rebound, and investors would still have gained almost 20% since the start of the year. Bitcoin’s rebound however, was not enough to make up for its fall, perhaps signalling a less resilient investor base. While analysts continue to speculate about whether the slide is over or what the price could fall to, this serves as a painful reminder that even a cryptocurrency as well-known as Bitcoin could theoretically fall all the way to zero, as it lacks intrinsic value.
It is clear that currently, Bitcoin is a far-cry away from being a gold replacement. The cause of the Bitcoin crash is still under debate among analysts, which further highlights the almost fickle nature of its price movements. Bitcoin performance is heavily driven by investor sentiment, pointing towards the need for careful consideration about its inclusion in a portfolio, at even small sizes.
Global markets were increasingly driven by political developments, especially Japan’s election stimulus, UK political instability, and China’s Treasury positioning, while resilient economic growth and AI-led equity strength supported overall market performance.
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US-Iran nuclear negotiations resumed, with indirect talks in Oman and a second round scheduled in Geneva. Iran signalled willingness to compromise if sanctions are lifted, while the US insists Iran must stop uranium enrichment entirely.
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White House border czar Tom Homan on Sunday brushed off Democratic demands to reform ICE amid mounting backlash over the agency's tactics and a partisan deadlock over homeland security funding.
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In Munich, Secretary of State Marco Rubio reaffirmed the US commitment to the transatlantic alliance, assuring European leaders that their destinies remain "intertwined" as the Trump administration seeks to strengthen ties.
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US CPI inflation fell to 2.4% year-on-year in January, down from 2.7% in December, and below expectations of ~2.5%.
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Prime Minister Keir Starmer faced severe leadership pressure following senior resignations, raising concerns about government stability and policy continuity.
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UK financial markets reacted sensitively, with sterling and gilts volatile as investors monitored risks to fiscal discipline and economic policy direction.
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The UK economy showed weak growth (0.1% in Q4 2025), adding pressure on the government, as slow economic momentum compounds political risks.
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Bank of England held rates at 3.75%, reflecting slowing inflation and weaker growth forecasts but ongoing inflation vigilance.
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The Munich Security Conference (13–15 Feb) convened global leaders, with discussions dominated by Iran-related nuclear risks, Middle East instability, and broader geopolitical and technology security concerns.
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EU leaders debated measures to strengthen Europe’s competitiveness and economic independence, focusing on single market reforms and industrial resilience. European Commission President Ursula von der Leyen called for deeper defence cooperation and stronger collective security amid rising geopolitical risks.
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The European Parliament moved forward with a proposed €90 billion loan package for Ukraine, reinforcing EU fiscal and military support amid ongoing war risks.
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ECB kept rates unchanged at 2.0%, highlighting economic resilience despite inflation falling below target.
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Hong Kong business confidence shows improved sentiment in Hong Kong despite global uncertainty
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China expanded trade ties with a zero-tariff agreement with South Africa, underpinning Belt & Road economic diplomacy.
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Japan held a rare winter general election; PM Takaichi’s conservative LDP won a landslide victory securing Japan’s first female prime minister, shaping fiscal policy direction.
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Countries including Canada, Australia, India, and Brazil are deepening cooperation to balance China and US influence.
