Briefly,
- It's too early to tell if Bitcoin's decoupling from stocks is a long-term trend, say analysts.
- Bitcoin outperformed stocks over the last few weeks.
- Recently, the largest cryptocurrency by capitalization was trading around $93,000. This is an increase of 7% in one day.
The word “Is” is used to describe the concept of a person. Bitcoin What if you decoupled from high-risk assets, like stocks and turned into “a safe haven”, like gold.
Analysts say it’s too soon to know if the trend is going to continue.
Crypto data provider says that the Bitcoin price was trading at $93,000 Tuesday. This is an almost 7% increase over the last day. CoinGecko. Price of the asset soared when U.S. Treasury secretary Bessent declared that Washington’s tariff war against Beijing is “unsustainable” and will de-escalate. Bloomberg.
This uptick comes after a rocky trading session Monday. The S&P 500 and Nasdaq fell 3%, while Bitcoin moved higher alongside gold. The dollar had already weakened after U.S. president Donald Trump’s comments on Sunday. Apply pressure Jerome Powell, Chairman of the Federal Reserve Board, is urged to reduce interest rates.
Jake Ostrovskis wrote in an OTC note on Tuesday that the divergence in prices between Bitcoin and equities may only last a short time if they are simply linked to a slump in greenbacks. Jake Ostrovskis, an OTC trader at Wintermute, wrote in a Tuesday note that the U.S. Dollar Index will be one of the key measures to monitor. It is used to measure changes in the value of a dollar relative to other currencies.
He said, “I’m convinced that the USD has been weakening and this is driving the movement.” If that is the case, then the decoupling of equities from the DXY may not last once it stabilizes.
The fear that tariffs could lead to inflation has hammered the risk assets over the last month. Costs and growth slowdown For consumers and businesses. Compass Point analysts Ed Engel, Joe Flynn, wrote on Tuesday in their note that Bitcoin’s behavior has been different from previous sales.
Bitcoin has historically been highly correlated with equities during selloffs that are based on macroeconomic events, but the analysts wrote that the asset’s 30-day correlation with the S&P 500 recently stood at 0.65. A correlation of 1 signifies a perfect positive correlation. -1 indicates the opposite.
With Bitcoin’s performance since April 2–when Trump imposed harsh global tariffs on nearly all trading partners worldwide–somewhere between that of gold and the S&P 500, it’s clear that investors are rethinking how the leading cryptocurrency fits within broader markets, David Duong, head of research at Coinbase Institutional, told Decrypt.
According to Powell, the “unsustainable dynamics of debt” and Trump’s willingness towards Powell are what is driving this shift.
Duong still said that it was too early to determine whether Bitcoin’s recent surge is a result of an overall shift in perceptions among investors, or something more transient.
“Bitcoin’s resilience over the last seven days, when stocks were on a downward trend, seems to indicate a shift in capital market assumptions,” said he. However, before I can say Bitcoin is decoupled, we need to observe this trend through different market conditions.
James Rubin is the editor
