Bitcoin (BTC) has long been considered the "digital gold." However, as the global economy wobbles due to escalating trade tensions during Trump's second term, institutional investors are turning to physical gold.

A recent Bank of America (BofA) survey shows that 58% of fund managers view gold as the safest haven during trade wars—while Bitcoin is favored by only 3%.

Bitcoin's Haven Status Faces Reality

Gold is proving its dominance as the preferred crisis asset while Bitcoin struggles to maintain its position. This occurs against a backdrop of increasing geopolitical risks, expanding US budget deficit, and instability driving capital away from markets.

"In a recent Bank of America survey, 58% of fund managers believe gold performs best in trade wars. This compares to just 9% for 30-year Treasury Bonds and 3% for Bitcoin," The Kobeissi Letter noted.

For years, Bitcoin supporters have viewed it as a hedge against economic instability. However, in the volatile macro environment of 2025, Bitcoin struggles to gain complete trust from institutional investors.

The Bank of America survey reflects this situation, with long-term US Treasury bonds and even the USD losing attractiveness as trade wars and financial disruptions shake market confidence.

The US deficit crisis—currently forecast to exceed 1.8 trillion USD—has further eroded trust in traditional safe havens like US Treasury Bonds.

"This is what happens when the global reserve currency no longer behaves like a global reserve currency," a trader sarcastically posted.

However, instead of turning to Bitcoin as an alternative, institutions are overwhelmingly choosing gold, doubling physical gold purchases to record levels.

Barriers to Institutional Bitcoin Acceptance

Despite its fixed and decentralized supply, Bitcoin's short-term volatility remains the primary barrier to institutional acceptance as a true safe-haven asset.

Although some traders still view Bitcoin as a long-term store of value, it lacks immediate liquidity and the risk-averse appeal that gold provides during crises.

Moreover, President Trump is expected to announce extensive new tariffs on "Liberation Day." Experts warn this event could cause extreme market volatility.

"April 2nd is like election night. It's the biggest event of the year with significant importance. Ten times more important than any FOMC, that's huge. And anything could happen," Alex Krüger predicted.

Trade tensions have historically pushed capital into safe-haven assets. With this announcement approaching, investors are preparing, prioritizing gold over Bitcoin.

"Gold is no longer just an inflation hedge; it's being seen as a hedge against everything: geopolitical risk, de-globalization, financial disruption, and now weaponized trade. When 58% of fund managers say gold leads in trade wars, it's not just sentiment but allocation flow. When even long-term bonds and the dollar step aside, that's a signal: the old playbook is being rewritten. In a world of rising tariffs, FX tensions, and twin deficits, gold might be the last politically neutral store of value," trader Billy AU observed.

While Bitcoin struggles to attract institutional safe-haven capital in 2025, its long-term narrative remains intact.

Specifically, the global monetary reserve system is changing, concerns about US debt are increasing, and monetary policies continue to evolve. Despite all this, Bitcoin's value as an uncensored, Borderless asset remains relevant.

However, in the short term, volatility and lack of widespread institutional acceptance as a crisis hedge mean gold is leading.

For Bitcoin believers, the critical question is not whether Bitcoin will challenge gold one day, but how long it will take for institutions to accept it as a safe-haven asset.

Until then, gold remains the undisputed king in times of economic chaos. Meanwhile, Bitcoin (excluding BTC exchange-traded funds) is trying to prove its position in the next financial transformation.

"The demand for ETFs is real, but part of it is just to profit from price differences… There is genuine demand for owning BTC, just not as much as we've been led to believe," analyst Kyle Chassé said recently.