Bitcoin is staging a strong comeback, emerging as a viable hedge for investors fleeing U.S. assets amid President Donald Trump’s intensifying trade war and global uncertainty over American economic leadership.
Following an initial slump after Trump’s “Liberation Day” tariffs announcement on April 2, bitcoin surged 15% in April, outperforming major stock indices and even gold, long considered a safe-haven during market turbulence. The cryptocurrency is now approaching the $100,000 mark, a level not seen since February.
Key Highlights:
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Bitcoin gained 33% from its April low.
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S&P 500 dropped 0.8% in April; Nasdaq rose just 0.8%.
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U.S. dollar index fell over 4%, underscoring weakening sentiment.
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Bitcoin has outperformed gold’s 11% rise since April 2.
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VanEck data shows bitcoin outpaced equities in 10 of 17 trading sessions.
Changing Correlations:
Analysts at Block Scholes note that bitcoin’s historical tight link to equity markets is loosening. It now shows the strongest inverse correlation to the U.S. Treasury yield curve in two years, signaling a potential shift in investor behavior as they turn to bitcoin as a macro hedge rather than a tech proxy.
Ben McMillan of IDX Advisors emphasized bitcoin’s emerging role as a diversification asset, noting reduced volatility levels and rising flows into digital asset funds.
Strategic Reallocation Underway:
According to CoinShares, $5.5 billion has flowed into crypto-focused funds in the past three weeks, including $1.8 billion specifically into bitcoin investment products. Standard Chartered’s Geoff Kendrick predicts bitcoin could hit $120,000 in Q2 2025 if global capital reallocates away from U.S. stocks, bonds, and the dollar.
Yet, bitcoin hasn’t completely decoupled from macro forces. Its 30-day correlation with the S&P 500 has rebounded to 0.87, suggesting a continued sensitivity to broader risk sentiment.
“The damage has been done in terms of trust towards the U.S. and dollar assets … but you can’t diversify overnight,” said MarketVector’s Martin Leinweber.
Still, the narrative of bitcoin as a digital alternative to traditional hedges like gold is gaining traction, especially in a world where monetary policy, trade alignments, and fiscal regimes are becoming increasingly unpredictable.