Bitcoin Pauses as Gold Surges to Record High Amid Tokyo Inflation Spike

Bitcoin's Current Status

Bitcoin (BTC) has taken a breather this Friday morning, with prices hovering near $104,400, just 4.7% shy of its all-time high. The pause in the rally comes amidst a significant rise in gold prices (XAU), which is traditionally viewed as a risk asset.

Tariff Threats Impacting BTC

President Trump's renewed tariff threats appear to have stalled BTC’s momentum. While some analysts are predicting a potential sell-off before another bullish wave, the onchain derivatives market shows a different sentiment. According to Nick Forster, founder of Derive.xyz, there’s only a 9.7% chance of BTC dipping below $75K before March, while the likelihood of it soaring over $250K before September is a mere 4.4%.

Gold Hits New Heights

Gold prices have soared to a record high of $2,799 per ounce, marking a 6.5% increase this month alone. This surge is attributed to increased borrowing of gold from central banks, driven by fears of possible import tariffs. Jeroen Blokland from Blokland Smart Multi-Asset Fund suggests that gold's rise against major fiat currencies signals potential currency debasement, leading to greater interest in cryptocurrencies.

Gold-backed tokens, like Tether Gold (XAUT), are also experiencing gains, with XAUT reaching $2,796 on Bitfinex, while PAXG is edging towards $2,800.

Inflation in Tokyo

In related economic news, consumer inflation in Tokyo has accelerated, with the core figure rising 2.5% year-over-year in January. This uptick supports expectations of further Bank of Japan (BOJ) rate hikes. Following last week’s increase in the policy rate to 0.5%, the strongest in over 16 years, a potential yen surge could destabilize riskier assets, as evidenced by the AUD/JPY currency pair's decline, indicating a risk-off sentiment in the market.