Bitcoin lost ground Wednesday against the Japanese yen, retreating from key resistance as Goldman Sachs reaffirmed its view that the yen is the most effective hedge against escalating U.S. recession and trade risks.
BTC/JPY dropped roughly 1% on bitFlyer after failing to break above a trendline drawn from its January 20 all-time high, according to TradingView. Bitcoin also slipped versus the dollar, while Asian equities and U.S. futures moved sideways ahead of President Trump’s widely anticipated “Liberation Day” tariff announcement.
The tariff rollout, expected to target 15 countries, has prompted banks including JPMorgan and Goldman to raise their probability estimates for a near-term U.S. recession.
While some digital asset proponents believe Bitcoin could serve as a safe-haven in downturns, Goldman maintains the yen is the superior play.
“The yen is our preferred hedge in the event U.S. recession risk intensifies,” said Kamakshya Trivedi, Global Head of FX and Rates Strategy at Goldman Sachs. He noted the currency tends to outperform when both equities and real yields in the U.S. decline—a dynamic currently unfolding.
Despite being dubbed “digital gold,” Bitcoin continues to correlate with tech-heavy risk assets, making it vulnerable in a risk-off environment. Compounding the challenge: yen strength can trigger unwinding of carry trades, pressuring risk assets further. That phenomenon hit crypto hard in August 2024, when Bitcoin dropped from $65,000 to $50,000 in under a week.
Goldman forecasts the yen strengthening into the low 140s versus the dollar in 2025. At time of writing, USD/JPY trades near 149.77. A falling U.S.–Japan bond yield spread—driven by Japanese yields at their lowest since August 2022—supports that view.
With macro volatility rising and policy uncertainty ahead, investors appear to be choosing the traditional safe-haven over the digital one.
