Dave Portnoy, the candid founder of Barstool Sports, raised a provocative question on X last week that resonated within the crypto community: “If Bitcoin is meant to operate independently of the U.S. Dollar and remain unregulated, why does it now seem to trade almost identically to the U.S. stock market?”
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That succinct query encapsulated what many casual investors have been pondering, especially following a sharp decline in Bitcoin and crypto stocks after President Donald Trump’s announcement regarding new tariffs on Wednesday.
Before Trump’s tariff declaration, Bitcoin was trading around $88,000. Shortly after the announcement, it fell below $83,000. It wasn’t just Bitcoin; stocks also plummeted during after-hours trading, particularly tech-heavy ETFs like Invesco QQQ (NASDAQ:QQQ), which saw a drop of 4%.
Crypto-related stocks mirrored this downturn. MicroStrategy (NASDAQ:MSTR) fell by 7%, Coinbase (NASDAQ:COIN) decreased by 6%, and Robinhood (NASDAQ:HOOD) lost 9%.
So much for the notion of being “independent.”
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Numerous individuals contributed their insights in response to Portnoy’s question. Some cited the role of institutional investors, others attributed it to emotional trading behavior, while a few referenced technical analysis.
“Bitcoin behaves like a risk asset in the short term because it’s the most liquid and salable asset that operates 24/7,” asserted MicroStrategy Executive Chairman Michael Saylor. “During periods of panic, traders will sell what they can, not necessarily what they want to.”
Plain logic also comes into play: “If you needed to cover your rent, what would be your first move? Selling Apple stock or liquidating your crypto?” one user commented.
Another user added, “Boom. Realizing big money has effectively taken control of Bitcoin, it’s no different from the stock market now.”
Some adopted a sarcastic tone: “Day 1 of the bear market: Portnoy discovers correlation.” Another remarked: “It was once a currency before being co-opted and transformed into a collectible.” Analyst Benjamin Cowen joined the fray, questioning, “How can you be of that age and make such a statement?”
Conversely, some defended Bitcoin’s foundational ideals. “Traders are merely the froth; the hodlers provide the stability,” one remarked. Another noted, “Bitcoin has been the most successful asset over the past 15 years.”
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The most recent downturn in Bitcoin wasn’t unexpected. Wall Street was already staggering from inflation concerns and declining consumer sentiment. Just days prior to “Liberation Day,” The Dow Jones Industrial Average fell by over 700 points, the S&P 500 experienced a 2% decrease, and the Nasdaq (NASDAQ:NDAQ) dropped nearly 3%.
Trump’s tariff announcement reignited trade war anxieties. The GDPNow forecast from the Atlanta Fed now predicts a 2.8% economic contraction for Q1, up from a prior estimate of -3.7% as of April 1.
Although Bitcoin has displayed some resilience relative to stocks, it still aligns with the same downward trends when fear permeates the market.
Many still hold onto Bitcoin’s original promise as a decentralized safeguard against economic turmoil. However, the consensus remains that Bitcoin is currently regarded as a risk-sensitive asset, behaving as such in the market.
As Portnoy highlighted, it increasingly appears to be just another piece of the system it aimed to disrupt—“Market goes up, Bitcoin goes up. Market goes down, Bitcoin goes down.” Echoing this sentiment, Ross Gerber, CEO of Gerber Kawasaki, commented, “BTC price movements correlate with market sentiment. When risk is on, prices rise; when risk is off, they fall.”
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This article, Dave Portnoy Raises a Key Question, ‘If Bitcoin Aims for Independence from the Dollar, Why Does It Trade Like the Stock Market?’ originally appeared on Benzinga.com
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