Bitcoin is once again attracting attention as a potential safeguard against economic turmoil, having remained relatively stable during an unprecedented downturn in the stock market that resulted in a $5 trillion loss for the S&P 500.
According to a report by Reuters on April 5, the S&P 500 experienced a staggering $5 trillion decline in market capitalization over just two days, marking its most significant drop on record, and exceeding the $3.3 trillion drop seen in March 2020 amid the initial COVID-19 pandemic wave.
This historic sell-off followed an announcement from US President Donald Trump regarding reciprocal import tariffs on April 2, aimed at reducing the nation’s estimated $1.2 trillion trade deficit in goods and enhancing domestic manufacturing.
S&P 500 records a $5.4 trillion loss. Source: Zerohedge
According to Marcin Kazmierczak, co-founder and chief operating officer of RedStone blockchain oracle firm, Bitcoin’s (BTC) decline following the tariff announcement was notably less severe than that of traditional markets, highlighting Bitcoin’s increasing maturity as a global asset.
“What we are likely witnessing is a shift in Bitcoin’s market positioning,” Kazmierczak told Cointelegraph, adding:
“Historically, Bitcoin has been closely tied to risk assets during macroeconomic shocks, but this deviation might indicate a changing perception among investors.”
“The fixed supply model of Bitcoin stands in stark contrast to fiat currencies, which might struggle with inflationary pressures due to tariff-induced economic changes,” he noted.
Related: 70% chance of crypto bottoming before June amid trade fears: Nansen
In the face of plummeting stock values, Bitcoin only dipped by 3.7% over the same two-day timeframe, trading around $83,600 as of April 5, according to TradingView data.
BTC/USD, 1-hour chart. Source: Cointelegraph/TradingView
Despite the $5 trillion decline in traditional markets, “BTC proves its resilience, remaining above the key support level of $82,000 — indicating that structural demand is still robust even amid forced sales and heightened volatility,” stated Nexo dispatch analyst Iliya Kalchev to Cointelegraph.
Related: Michael Saylor’s Strategy buys Bitcoin dip with $1.9B purchase
Bitcoin may emerge as “digital gold” amid Trump tariff discussions
Even though Bitcoin appears to be decoupling from traditional stocks, its initial price drop suggests that some investors continue to view Bitcoin as a risk asset, according to James Wo, founder and CEO of venture capital firm DFG.
“With Bitcoin ETFs facilitating greater institutional participation, it is increasingly influenced by macroeconomic conditions,” Wo explained to Cointelegraph, adding:
“However, if Bitcoin remains strong amid current uncertainties, its capped supply and decentralized nature could reinforce its ‘digital gold’ narrative and establish it as a more dependable store of value.”
Though current momentum is lacking, analysts maintain confidence in Bitcoin’s upside potential for the remainder of 2025.
BTC projected to reach $132,000 based on M2 money supply growth. Source: Jamie Coutts
Estimates from Jamie Coutts, chief crypto analyst at Real Vision, suggest that the increasing money supply could drive Bitcoin’s price beyond $132,000 before the conclusion of 2025.
Magazine: Bitcoin ATH sooner than expected? XRP may drop 40%, and more: Hodler’s Digest, March 23 – 29
