Gold surged to a record high on Monday, breaking above $5,000 for the first time as investors sought safe havens amid geopolitical tensions, tariff threats, and rising US shutdown risks.
Bitcoin dropped to $86,000 amid increased selling pressure that widened the valuation gap between digital assets and precious metals. Bullion reached $5,080, bringing its 2026 rally to 17%, while crypto markets declined, and global asset volatility increased.
Gold advanced sharply as fears of a US government shutdown grew ahead of the end-of-month deadline. Analysts linked the rally to political instability and concerns that federal operations may halt again.
The Kobeissi Letter said a potential shutdown added momentum to precious metals as sentiment shifted quickly across markets. At the same time, traders reduced exposure to assets tied closely to growth and liquidity.
Trade tensions also intensified over the weekend after President Donald Trump threatened a 100% tariff on Canada over a possible trade deal with China. The warning added pressure to already fragile global trade expectations.
Gold also benefited as investors stepped away from US Treasuries, traditionally seen as a safe haven. Shutdown risks and renewed tariff threats weakened demand for government debt.
Bitcoin fell during the same period, extending losses as investors raised cash during market stress. Since Jan. 18, bitcoin has dropped 6.6%, while gold gained 8.6% over the same period.
A CoinDesk report noted that bitcoin often sells off during uncertainty despite its design as censorship-resistant money. In practice, investors sell it first when liquidity needs rise. Market data showed Bitcoin trading at $87,846.82 during the latest snapshot, down 0.92% over 24 hours.
Its market capitalization slipped 0.91% to $1.75 trillion. Trading activity surged as 24-hour volume climbed to $45.35 billion, up 194.45%. The volume-to-market-cap ratio stood at 2.53%, pointing to heavy but orderly trading. The intraday chart showed Bitcoin opening near $88,800 before falling to around $86,000. Prices later rebounded toward $87,800, trimming part of the decline.
Crypto markets dropped further on Sunday evening as shutdown odds jumped sharply.
Kalshi and Polymarket showed roughly 80% odds of a shutdown by Saturday, Jan. 31. Those odds rose from below 10% just one day earlier. The shift followed a funding standoff in Congress.
Senate Democrats said they would block an appropriations bill if it included funding for the Department of Homeland Security. Senate Majority Leader Chuck Schumer confirmed the party’s position. As a result, the total crypto market capitalization fell from $2.97 trillion to $2.87 trillion within hours. Bitcoin dropped 3.4%, while Ethereum fell 5.3%.
CoinGlass data showed that more than $360 million in leveraged positions were liquidated.
Long positions accounted for $324 million of that total. Jeff Mei of BTSE said investors showed less interest in Treasuries despite expectations that the Federal Reserve will hold rates steady. Shutdown risks and tariff threats instead pushed capital toward gold. With gold surging and bitcoin selling off, markets now face a key question: can bitcoin reclaim its role as a crisis hedge when investors prioritize immediate liquidity?
Read More: Bitcoin Profit Cools as Gold Holds Near Record Highs: What Investors Should Note
Gold climbed above $5,000 as investors sought safety amid geopolitical tensions, tariff threats, and rising US government shutdown risks. At the same time, bitcoin weakened as liquidity needs drove selling across crypto markets. The divergence shows how stress shifts capital toward traditional havens during political uncertainty.