Bitcoin Shows Price Independence Amid Stock Market Drop Following Tariff Announcements
President Trump‘s tariff policies caused a stock market decline, erasing over $5 trillion in value within two trading days.
Bitcoin’s price remained resilient, indicating a potential separation from stock market trends.
This price stability suggests Bitcoin may be moving towards $100,000.
Bitcoin Price Decouples From Equity Market
Equity and gold markets declined. Bitcoin’s price rebounded.
This occurred after recent tariff announcements. Bitcoin shows early signs of breaking correlation with US stock indices.
It maintained a value above $82,000 during a Friday downturn that erased $2.5 trillion from the S&P 500 Index.
Market Sell-off Occurs After Tariff Announcement; Bitcoin Recovers
Financial markets reacted negatively to President Trump’s tariff announcements.
A two-day sell-off followed, removing over $5 trillion from US equity values.
By Friday’s close, the S&P 500 and Nasdaq Composite each fell almost 6%.
The Dow Jones Industrial Average decreased by 5.5%, its largest single-day drop since June 2020.
Bitcoin initially decreased to $81,500 after the tariff news.
Bitcoin quickly recovered to $84,600 by Friday’s close.
Despite pressure on Friday morning, Bitcoin stabilized and rose back above $84,000 during the day.
Currently, TradingView data indicates Bitcoin trades at approximately $83,700, a slight decrease over the past 24 hours.
Blockstream CEO Comments on Correlation
Blockstream CEO Adam Back stated Bitcoin’s recent separation from stock market movements suggests prior correlation may have been due to market dynamics.
He proposed market maker activity, exploiting liquidity conditions, potentially driving this.
Back indicated the correlation might have been artificial and market makers could have used Bitcoin’s limited fiat liquidity to auto-correlate Bitcoin, particularly when the US market opened.
Analyst Highlights Potential Bitcoin Outperformance
Market analyst Macroscope suggests Bitcoin’s price could follow gold’s historical trends.
He proposed Bitcoin reclaiming $100,000 could shift capital from gold to Bitcoin and repeat historical outperformance.
Macroscope stated previous cycles show reclaiming recent highs initiated new outperformance periods.
Tariffs May Catalyze Bitcoin Price Independence
BitMEX co-founder Arthur Hayes said Trump’s tariffs, while negative for traditional markets, could allow Bitcoin to decouple from tech stocks.
He suggested tariffs might break Bitcoin’s Nasdaq correlation, enabling Bitcoin to act as a fiat liquidity indicator.
Hayes added tariff consequences will likely compel governments and central banks to increase money printing to stabilize markets.
Bitcoin Seen as Fiat Debasement Hedge
This expected monetary expansion increases Bitcoin’s attractiveness as a limited asset that hedges against fiat currency devaluation.
Hayes and analysts view tariffs as potentially positive for Bitcoin’s long-term value.
Strategy co-founder Michael Saylor stated tariff market reactions show inflation is a starting point.
He noted capital faces dilution, and Bitcoin provides resilience against risks.
Also Read: Trump Administration Announces Global Tariff Plan
