Bitcoin Fails Safe-Haven Stress Test: Gold Hits ATH as Jefferies Exits on Quantum Fear
Bitcoin drops 2.7% as Jefferies strategist Christopher Wood exits his five-year position for gold, citing quantum computing risks amid Trump’s new tariff threats.
The Decoupling Event
The “Digital Gold” narrative faced a live-fire stress test this weekend and blinked. Following President Trump’s Saturday announcement of a 10% tariff on eight European nations, risk assets and safe havens diverged violently. While gold surged to a fresh all-time high of $4,690, Bitcoin shed over 2.7%, struggling to hold $92,500.
The geopolitical trigger was specific: a 10% levy on countries including the UK, Germany, and France effective Feb. 1, escalating to 25% by June if Denmark refuses a deal on Greenland. Markets reacted instantly. Liquidity fled crypto, triggering $864 million in liquidations over 24 hours. The correlation breakdown is stark: Gold is pricing in geopolitical chaos; Bitcoin is pricing in liquidity constraints.
Jefferies Abandons the Trade
The sell-off coincides with a significant institutional capitulation. Christopher Wood, Global Head of Equity Strategy at Jefferies, removed his entire 10% Bitcoin allocation from the firm’s long-running “Greed & Fear” portfolio. Wood held the position since December 2020.
His rationale was not price action, but existential risk. In a note to clients, Wood cited the accelerating threat of quantum computing to Bitcoin’s cryptographic security as the primary driver. He reallocated the capital directly into physical gold (5%) and gold mining stocks (5%). This is not a profit-taking rotation; it is a structural disqualification of Bitcoin as a long-term store of value by a major strategist.
Sentiment Collapses
The divergence has emboldened critics. Economist Peter Schiff noted the failure of BTC to rally alongside bullion undermines its core value proposition. “Bitcoin’s failure to match gold’s gains… potentially resulting in a spectacular crash,” Schiff posted.
Prediction markets confirm the bearish pivot. On Polymarket, the odds of Bitcoin reclaiming $100,000 by the end of January have plummeted to 27%, down from near-certainty just weeks ago. The market is no longer pricing in a hedge against the tariff war; it is pricing in the liquidity shock of the tariffs themselves.
Traders now look to the Feb. 1 implementation date. If the 10% duty goes live without a diplomatic off-ramp, the liquidity squeeze on risk assets could deepen, further isolating gold as the sole beneficiary of the trade war.
