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Bitcoin Regains Shine as Investors Rethink U.S. Assets Amid Trade War Fears

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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:

  • Bitcoin gained 33% from its April low.

  • S&P 500 dropped 0.8% in April; Nasdaq rose just 0.8%.

  • U.S. dollar index fell over 4%, underscoring weakening sentiment.

  • Bitcoin has outperformed gold’s 11% rise since April 2.

  • 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.

GameStop’s Crypto Pivot Boosts Shares of One-Time Retail Investor Favorite

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GameStop’s decision to invest in bitcoin has sparked renewed interest in the company, leading to an 11.6% surge in its shares to $28.36. The move comes as GameStop’s core brick-and-mortar business faces challenges in attracting customers, but its crypto pivot has brought retail investors back to the stock, once a meme stock favorite.

GameStop’s Bitcoin Investment Strategy

GameStop revealed its new investment strategy on Tuesday, declaring that it would hoard bitcoin as part of its treasury reserve assets. This aligns with the strategy of other companies, such as exchange operator Strategy, which holds a substantial amount of bitcoin. The announcement coincided with increased attention on digital assets, particularly cryptocurrencies, fueled by U.S. President Donald Trump’s focus on the sector.

Despite the positive reaction from retail investors, GameStop’s announcement of a $1.3 billion offering of five-year convertible notes to fund the bitcoin purchase led to a 5.5% drop in its stock during after-hours trading.

Analysts Weigh in on Bitcoin’s Impact

Analysts are skeptical about the long-term impact of the bitcoin investment on GameStop’s share price. Wedbush’s Michael Pachter argued that while the move appeals to retail investors who want GameStop to invest in cryptocurrencies, it is unlikely to drive a substantial increase in the company’s stock value. He pointed out that while companies like Strategy have seen their stock value closely align with their bitcoin holdings, GameStop trades at a higher multiple relative to its cash reserves, which raises questions about the sustainability of this approach.

Despite the volatility of bitcoin, which has seen its price fall from a six-figure high earlier this year, GameStop’s decision to invest in digital assets could lead to increased market fluctuations, according to analysts like Daniela Hathorn from Capital.com.

The Bigger Picture

GameStop’s recent moves, including aggressive cost-cutting measures and store closures, helped the company more than double its net income in the last quarter, although sales dropped by about 30%. These efforts have provided some financial stability for the company, but it remains to be seen whether its pivot to digital currencies will provide sustained growth.

Trump Media Partners with Crypto.com to Launch ETFs Through Truth.Fi

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Trump Media & Technology Group, the company behind the Truth Social platform, announced on Monday that it has partnered with Crypto.com to launch exchange-traded funds (ETFs) and related products under its Truth.Fi brand. This collaboration is aimed at offering financial products that include both digital assets and traditional securities with a “Made in America” focus.

Following the announcement, Trump Media’s shares rose 10.5% in after-hours trading, though the company’s stock has fallen 38% over the past three months.

The ETFs, which will be available through Crypto.com’s broker-dealer Foris Capital, are expected to include cryptocurrencies like bitcoin and cronos, alongside securities from various industries. These funds are slated for launch later this year and will be offered in the U.S., Europe, and Asia.

Crypto.com will provide key infrastructure, including backend technology, custody services, and cryptocurrency support for the ETFs.

The partnership follows the January launch of Trump Media’s Truth.Fi brand, signaling the company’s expansion into financial services and fintech, particularly in the cryptocurrency space. Trump Media had previously announced plans to invest up to $250 million through Charles Schwab to diversify its cash holdings, which stood at over $700 million at the end of 2024. This new venture includes investments in ETFs, separately managed accounts, and cryptocurrencies.

Trump Media also revealed in February that it has applied for trademarks for several investment products, including the Truth.Fi Bitcoin Plus ETF, Truth.Fi Made in America ETF, and Truth.Fi U.S. Energy Independence ETF, which focus on sectors like bitcoin, U.S. manufacturing, and energy.