Bitcoin vs Gold: As uncertainty in the US economy intensifies, gold hits a new high, while BTC has a big dump to $112,000.

Against the backdrop of sharply rising uncertainty in U.S. policies, the price of Bitcoin (BTC) has suffered a heavy setback, falling to a recent low of $112,000. The risk aversion among institutional investors has led to a massive outflow of funds from the BTC Spot ETF, amounting to as much as $466 million, indicating a significant shift in market sentiment. This article deeply analyzes how the surge in the U.S. Economic Policy Uncertainty Index (EPU) affects risk assets, including Bitcoin, explores the different reactions of institutional and retail investors, and assesses the performance of the Bitcoin 'digital gold' narrative under macro pressures. For investors following Bitcoin price analysis, crypto assets fund flows, and the macroeconomic impact on BTC, this is a crucial market insight.

Macroeconomic Uncertainty Shock: Why Did Bitcoin Prices Plummet?

Bitcoin (BTC) has recently shown weak performance, with its price significantly dropping to 112,000 USD, marking one of the weakest performances in recent years. Although Bitcoin remains one of the most valuable assets globally, ranking eighth, surpassing Meta Platforms (Facebook) and Saudi Aramco, the price trend of BTC continues to be under pressure as uncertainty in the US economy deepens. Institutional investors are taking action, and the overall market sentiment has clearly turned against the prospects for Bitcoin growth.

Economic Policy Uncertainty Index (EPU) in the US Soars

The U.S. Economic Policy Uncertainty Index (EPU Index) recently soared to one of its highest levels, sending a severe warning signal to risk assets. According to data from Alphractal, the index surged to 617.32 between September 20 and 22, an increase of 456.23 points in a short period. Historically, such spikes in indicators have often placed heavy pressure on risk assets, including the S&P 500 Index. Analyst Joao Wedson attributed this increase to a series of U.S. policies and government actions:

"This rise was driven by intense debates over high trade tariffs, election uncertainty, and the Federal Reserve's decisions regarding interest rates and fiscal deficits, all of which sparked widespread media coverage of policy ambiguity."

In the face of this uncertainty, institutional investors are reacting by selling Bitcoin. The risk-return ratio of Bitcoin remains weak, increasing the possibility of further downward fluctuations.

Institutional Investors Withdraw: BTC Spot ETF Sees Record Fund Outflows

At the beginning of this week, institutional investors adopted a clear bearish stance. Data from Soso Value shows that U.S. Bitcoin Spot Exchange-Traded Funds (ETFs) recorded a net outflow of up to $466 million, with a single day outflow reaching $363.17 million on September 22.

This clearly indicates that funds are rotating towards safer assets. Farzam Ehsani, CEO and co-founder of VALR, described to AMBCrypto that this movement is a shift towards a "safe-haven trade." He added that:

"Recent performance of the crypto assets market and [Bitcoin] liquidity events have amplified volatility, weakening the confidence of market participants and prompting funds to shift towards tangible safe havens like gold in the short term."

As a result, the gold price has reached a historical high of 3,791 USD, recording a strong increase of 44% since the beginning of the year, while the rise of Bitcoin during the same period was only 21%. Ehsani believes that the poor performance of Bitcoin has weakened investors' confidence in its role:

"Investors are re-evaluating its role as a hedge against macro uncertainty. They remain skeptical about whether BTC can fulfill its narrative as 'digital gold' during periods of macro pressure and a strengthening dollar."

Retail investors attempt to take over: Buying power weakens

At the same time, amid market turbulence, Bitcoin exchange reserves have slightly decreased. A decline in centralized exchange reserves usually indicates that investors are transferring assets to private wallets for long-term holding.

As of the time of writing, reserves have only decreased by 348 BTC (worth 39.5 million dollars), which is relatively small compared to the massive selling pressure from institutional investors.

Retail investors need to significantly increase their purchasing volume to offset the continuous selling by institutions. Without this strong support, there is a risk of further decline in Bitcoin price, making its overall market outlook even more bleak. The market's focus is on whether the Bitcoin retail accumulation trend can turn the situation around.

Conclusion: The Safe-Haven Narrative of Bitcoin Faces Challenges

The recent sharp fall in Bitcoin is a direct result of the soaring uncertainty index of U.S. economic policy and the large-scale sell-off of BTC Spot ETF by institutional investors. The outflow of funds amounting to $466 million indicates that, under macroeconomic pressure and a strengthening dollar, investors are opting for traditional safe-haven assets like gold, which puts the narrative of Bitcoin as "digital gold" under severe test. Although retail investors have shown a slight willingness to buy, their strength is far from enough to offset the selling pressure from institutions. In the future, whether Bitcoin can stabilize will depend on whether institutional funds return and whether the uncertainty of U.S. economic policy can ease.