Markets Crashed Overnight—Gold Recovered, Bitcoin Didn’t

Bitcoin sold off sharply early Friday Asian time, plunging more than 5% from $89,000 to a low of $83,400 during US daytime trading. Unlike gold and equities, it failed to recover—exposing a troubling identity crisis for the so-called “digital gold.” The market is re-pricing trust in currencies and institutions, but that trust is flowing to gold vaults, not crypto wallets. Same Storm, Different Outcomes The sell-off was triggered by an escalation in US-Iran tensions after President Trump issued warnings on Truth Social, threatening military strikes unless Tehran agrees to a nuclear deal. Middle Eastern governments are attempting to push both sides into talks, but efforts have failed to gain traction as the US moves more firepower into the region. A looming government shutdown added to the risk-off mood. Gold responded with extreme volatility, dropping 7% to $5,250 within an hour before staging a dramatic V-shaped recovery. The Kobeissi Letter noted that gold’s market cap swung by $5.5 trillion in a single session—the largest daily swing in history. By early Asian trading on Friday, spot gold had climbed back above $5,400, up around 1%. This is absolutely insane:Gold just posted its largest daily swing in market cap in history, at $5.5 TRILLION.Between 9:30 AM ET and 10:25 AM ET, gold lost -$3.2 trillion in market cap, or -$58 billion PER MINUTE.Then, between 10:25 AM ET and 4:00 PM ET, gold added back… pic.twitter.com/9BmnY9g6Ap— The Kobeissi Letter (@KobeissiLetter) January 29, 2026 US equities, meanwhile, showed resilience. The Nasdaq shed just 0.7%, weighed down by Microsoft’s 10% plunge on AI spending concerns. But Meta surged 10% on strong earnings, and the Dow closed slightly positive. Bitcoin told a different story. It dropped to a low of $83,400 and managed only a tepid bounce to $84,200, far short of gold’s V-shaped recovery or tech’s selective rally. A Mania in Precious Metals, but Not in Bitcoin The divergence is stark. Gold has risen more than 25% this...