Bitcoin Stumbles Below $87,000 as Gold, Silver, and Copper Soar to Record Highs: What's Driving the Shift?

In a familiar pattern at the start of the U.S. trading day, the cryptocurrency sector quickly erased any overnight gains, with Bitcoin tumbling below $87,000 as American stocks opened post-Christmas. This poor price action occurred as metals like gold, silver, copper, and platinum surged to new record highs, attracting capital that might otherwise flow into Bitcoin amid global economic tensions.

Bitcoin's Price Drop and Market Context

Bitcoin briefly nudged above $89,000 overnight but quickly fell back, trading at $87,574.06 and down 1.6% over the past 24 hours. Ether (ETH) followed suit, dropping similarly to $2,934.79, while Dogecoin (DOGE) and XRP led losses with declines of over 4% and 3%, respectively. This slide highlights a broader crypto downturn as metals gain momentum.

Metals Surge Amid Geopolitical Tensions

The metals rally was led by palladium and platinum, both up more than 10%, with silver and copper gaining 5% and gold rising 1.5% to $4,573 per ounce. This surge is partly driven by the debasement trade and rising geopolitical tensions, including U.S. military actions in Nigeria and pressure on Venezuela, which may be diverting safe-haven flows away from cryptocurrencies.

Crypto Stocks and Miners Hit Hard

Crypto-related stocks also felt the pressure, with Coinbase (COIN) down 2%, while others like Gemini (GEMI) fell 6%. Bitcoin miners were particularly hard hit, with IREN, Cipher Mining, Terawulf, and Marathon Digital dropping 5% or more. Notably, Hut 8 (HUT), which had recently gained on AI plans, led losses with a 7.5% decline, underscoring the sector's vulnerability even amid diversification efforts.

Broader Market Sentiment

While metals soared, major U.S. stock indices like the Nasdaq, S&P 500, and DJIA traded nearly flat, indicating a selective risk-off sentiment. This divergence suggests that investors are favoring traditional safe-haven assets over cryptocurrencies in the current climate, raising questions about Bitcoin's role as a hedge in turbulent times.