The past few weeks have been tough for Bitcoin holders. Remember a few years ago when people called it "digital gold"—a hedge against inflation and a risk defender like physical gold? But by 2025, that argument seems to be losing its footing.

Digital assets look rather awkward now. Bitcoin has nearly quadrupled in the past five years, which sounds impressive, but in the last six months, it has dropped by 16%. Even with brief rebounds, it’s still about an 11% loss. In comparison, physical gold has performed much more steadily—up nearly 60% in the past year and 24% in just half a year. Long-term gold investors are definitely smiling more.

What exactly is wrong with Bitcoin?

Several explanations are circulating. One is that some investors are taking profits when things look good. Another is that the previously hawkish signals from the Federal Reserve (although they've since changed tone) are to blame—rising interest rates hurt assets that don’t generate cash flow. Some also point to energy costs. Mining is becoming more expensive, and Bitcoin’s fundamental logic is starting to look a bit awkward.

Even more painful is the pressure at the corporate level. Companies that relied on issuing stocks or bonds to keep adding to their holdings can no longer sustain that game. When the price drops and the company's market value falls below the cost basis, the tools for replenishing capital fail, and they may be forced to sell to pay off debts. As a result, the "digital gold" halo around Bitcoin dims a bit. Truly safe-haven assets wouldn’t need to be urgently converted into USD to settle bills when due.