Bitcoin Stands Firm as Precious Metals Plummet Amid Fed Nomination Turmoil
In a stark divergence of asset classes, Bitcoin (BTC) held its ground on Friday as traditional safe-haven assets gold and silver went into a tailspin. The precious metals sell-off, one of the most severe in recent years, coincided with President Donald Trump's nomination of former Fed Governor Kevin Warsh to lead the central bank, sending shockwaves through markets anticipating tighter monetary policy.
Gold prices tumbled nearly 9% to $4,877 per ounce during New York trading, while silver cratered by a staggering 28% to $82 per ounce. In contrast, Bitcoin edged up 0.2% to $83,873, showcasing a notable decoupling from the traditional inflation-hedge narrative. The volatility gauges for gold and silver ETFs spiked to multi-year highs, underscoring the panic in the sector.
Analysts point to the Warsh nomination as the primary catalyst. A known hawk, Warsh has publicly criticized the Fed's prolonged easy-money policies, arguing they have inflated asset bubbles. His potential leadership immediately strengthened the U.S. Dollar Index, which climbed to 96.94—a key headwind for non-yielding assets like precious metals. "This is a classic repricing of liquidity expectations," said market strategist Eleanor Vance. "Assets perceived as beneficiaries of loose policy are being re-evaluated first. Bitcoin's relative stability suggests some investors may view its digital scarcity as a different kind of hedge in this new environment."
Bitcoin's own trajectory has been volatile, falling sharply from $88,000 to near $81,000 just a day prior before stabilizing in the $82,000-$84,000 range. Despite being down over 6% for the week, sentiment on prediction platforms like Myriad is tilting bullish again, with odds favoring a climb to $100,000 over a drop to $69,000. However, the broader Crypto Fear & Greed Index plunged to 16, indicating pervasive 'Extreme Fear' among traders—its lowest level this year.
Market Voices:
"This is the moment crypto skeptics have feared—where Bitcoin doesn't behave like 'digital gold.' Its stability today is a powerful narrative shift. It's not just a hedge; it's becoming its own distinct asset class," commented David Chen, a portfolio manager at Horizon Digital Assets.
"The sheer panic in silver shows this is a liquidity crisis for the old guard. Bitcoin's network doesn't care who the Fed chair is. This resilience is a testament to its fundamental value proposition beyond macroeconomic whims," said Anya Sharma, a decentralized finance (DeFi) researcher.
"Let's not get carried away. One day of not crashing is not 'resilience.' Bitcoin is still down massively on the week, and the fear index is in the gutter. This is a dead-cat bounce in a bear market, propped up by hype. Warsh's history is anti-inflation, which is ultimately bad for all speculative risk assets, including crypto," argued Marcus Thorne, a vocal financial commentator and skeptic.
"The volatility in the metals market is extreme, but it forces institutional allocators to ask hard questions about portfolio diversification. Days like today will accelerate the comparison and likely lead to deeper due diligence on crypto's role," noted Rebecca Lin, Chief Investment Officer at a family office.