Family

Bitcoin

Strong

digital gold

Key takeaways:
<ul>
 <li>Bitcoin failed to break $90,000 again as investors favored gold and bonds.</li>
 <li>S&amp;P 500 record highs and lower interest rates have reduced Bitcoin’s appeal as a hedge compared to traditional equities.</li>
</ul>
<h2 id="btc-price-recovery-stalls-at-90-000">BTC price recovery stalls at $90,000</h2>
Bitcoin (<a href="/bitcoin-price" rel="noopener noreferrer">BTC</a>) faced strong <a href="https://cointelegraph.com/news/btc-price-pauses-90k-what-will-trigger-new-year-rally" rel="noopener noreferrer nofollow" target="_self">rejection near $90,000 on Monday</a>, triggering nearly $100 million in liquidations across leveraged positions.
Strong demand for traditional hedges such as gold and US government bonds led traders to question whether Bitcoin has the momentum needed to reclaim the $100,000 level.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019b6cc9-5f8e-7d96-9d53-c7462ba78deb.png" title="" alt="Bitcoin’s $90K rejection: Is BTC's digital gold narrative losing to bonds?">
 <figcaption style="text-align: center;">
 Gold/USD (left) vs. 2-year Treasury yield. Source: TradingView
 </figcaption>
</figure>
Gold prices held above $4,300 on Monday, while yields on the 2-year US Treasury fell to their lowest level since August 2022. Rising demand for government-backed assets signals broader risk aversion, particularly as the <a href="https://cointelegraph.com/news/french-central-bank-deficit-great-bitcoin-arthur-hayes" rel="noopener noreferrer nofollow" target="_self">US fiscal deficit</a> is expected to widen in 2026. The US Treasury also faces the difficult task of rolling over roughly $10 trillion in debt throughout the year.
Jimmy Chang, chief investment officer of the Rockefeller Global Family Office, reportedly <a href="https://www.reuters.com/business/finance/tenuous-peace-between-trump-30-trillion-us-bond-market-2025-12-29/" rel="noopener noreferrer nofollow" target="_blank">told</a> Reuters:
<blockquote>
 "We're in this age ⁠of financial repression with governments using various tools to artificially keep a lid on bond yields."
</blockquote>
Meanwhile, the negative impact of US import tariffs on economic growth has been offset by massive spending on artificial intelligence infrastructure, <a href="https://finance.yahoo.com/news/tenuous-peace-between-trump-30-080529481.html" rel="noopener noreferrer nofollow" target="_blank">according</a> to Yahoo Finance.
<h2 id="investors-wary-of-bitcoin-amid-rate-cuts">Investors wary of Bitcoin amid rate cuts</h2>
Investor sentiment has deteriorated since the US Department of Labor reported the November US unemployment rate at 4.6%, the highest level in four years. Under normal circumstances, such data would lead traders to raise expectations for a more aggressive stimulus stance from the US Federal Reserve (Fed). But this time, inflation risks have become a significant constraint.
Even so, the S&amp;P 500 surged to a new all-time high in December, adding to discomfort among Bitcoin investors. If the Fed continues to trim interest rates, equities tend to move higher due to the direct impact on corporate balance sheets.
Lower capital costs support higher valuations, while consumer credit conditions also improve. As a result, Bitcoin’s appeal as an independent hedge becomes less compelling.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019b6cc9-6444-72f0-868c-77c2eb185364.png" title="" alt="Bitcoin’s $90K rejection: Is BTC's digital gold narrative losing to bonds?">
 <figcaption style="text-align: center;">
 S&amp;P 500 futures (left) vs. Bitcoin/USD. Source: TradingView
 </figcaption>
</figure>
Bitcoin’s difficulty in holding the $90,000 level reflects traders’ risk perceptions, as the cryptocurrency has yet to establish itself as a reliable store of value amid a global recession.
If investments in artificial intelligence deliver the expected returns, major tech companies such as Microsoft (MSFT US), Nvidia (NVDA US) and Google (GOOG) could unlock additional valuation upside, potentially pushing equity markets to new all-time highs.
<h2 id="bitcoin-hash-rate-drops-is-it-bearish">Bitcoin hash rate drops: Is it bearish?</h2>
Bitcoin mining has also moved into focus amid rising energy costs. Investors worry that miners are operating at extremely low, or even negative, margins.
Tighter operating cash flows have pushed miners to rely more frequently on debt and equity-linked financing to maintain liquidity, including secondary share offerings. Meanwhile, the network hash rate has edged lower after peaking in late October.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-12/019b6cc9-68cb-7e7f-b9b3-7e0cf9724c6e.png" title="" alt="Bitcoin’s $90K rejection: Is BTC's digital gold narrative losing to bonds?">
 <figcaption style="text-align: center;">
 Estimated Bitcoin hash rate, petahashes/second. Source: Coinmetrics.io
 </figcaption>
</figure>
However, VanEck analysts argue that <a href="https://cointelegraph.com/news/bitcoin-mining-woes-may-signal-bullish-price-action" rel="noopener noreferrer nofollow" target="_self">Bitcoin miner capitulation</a> is “historically a bullish contrarian signal.” A report by VanEck crypto research lead Matt Sigel noted that Bitcoin’s 90-day forward returns have historically been positive 65% of the time following 30-day periods of network hashrate decline. The report attributed the recent drop in hash rate to the shutdown of 1.3 gigawatts of <a href="https://cointelegraph.com/news/bitcoin-hashrate-drop-xinjiang-mining-shutdown-claims-us-china" rel="noopener noreferrer nofollow">mining capacity in China</a>.
Related: <a href="https://cointelegraph.com/news/strategy-bitcoin-purchase-active-2025-accumulation" rel="noopener noreferrer nofollow" target="_self">Strategy’s latest 2025 Bitcoin purchase caps active year of accumulation</a>
Another factor behind investors’ reluctance to add exposure near the $87,000 level is the compression in valuation multiples among digital reserve asset companies. There is little incentive to issue shares below the market value of their underlying Bitcoin holdings.&nbsp;
For example, Strategy (MSTR US) traded at a 16% discount, while Twenty One Capital (XXI US) was valued 18% below its reserves, according to BitcoinTreasuries.
Ultimately, Bitcoin’s trajectory depends on a shift in risk perception that favors the digital gold narrative. This process may take longer as attention remains focused on global economic growth risks.
This article is for general information purposes and is not intended to be and should not be taken as, legal, tax, investment, financial, or other advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.

Bitcoin’s $90K rejection: Is BTC's digital gold narrative losing to bonds?

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