'Not Too Early' to Consider Bitcoin a Safe Haven Amid Tariff Turmoil, Outperforming Stocks and the Dollar

Bitcoin bulls have long been frustrated to see the crypto trade in a fashion similar to stocks and other assets perceived as risky, rather than as a store of value such as gold. Now, some think they see tentative signs of a shift.

They’ve argued that bitcoin as a decentralized, nonsovereign asset with a fixed supply, should trade more like gold, with an ability to hold its value against a backdrop of extreme market volatility. However, for years it has failed to do so, often moving in lockstep with U.S. equities.

Bitcoin, however, has showed relative strength in the past few weeks against the U.S. stocks and the dollar, which both tumbled as the uncertainty around President Donald Trump’s trade policies roiled global financial markets, noted Eric Rose, head of digital-asset execution at StoneX Digital, in a phone interview with Cryptonesia.

Bitcoin remained robust despite the U.S. Treasury bonds — considered a highly conventional sanctuary for investors during times of distress — also facing fluctuations. a sharp selloff earlier this month before stabilizing later.

“I would describe the trading behavior of bitcoin versus every other asset over the last two weeks as strange, but not in a bad way,” Rose said. Historically, it’s rare to see stocks and the dollar retreat side by side Moreover, it's rare for Bitcoin to increase when equities drop significantly, he mentioned.

This does not imply that Bitcoin is about to become one of the conventional safe-haven assets, according to Mark Hackett, who serves as the chief market strategist at Nationwide Financial.

I'm not prepared to claim that Bitcoin has turned into a store of value or a safe haven asset just yet, but gold undoubtedly fits this description," Hackett stated. "In recent years, we've discovered that Bitcoin tends to be more associated with high-risk scenarios rather than protective ones, at least up until now.

Bitcoin’s recent strength may be driven by some idiosyncratic reasons that are not sustainable, such as MicroStrategy Inc.’s purchases of the crypto, Hackett added. MicroStrategy, a software company that is now more seen as a leveraged bitcoin proxy, bought another 6,556 bitcoins for $555.8 million between April 14 and April 20, according to a recent regulatory filing.

"It's 'somewhat premature' for Bitcoin enthusiasts to assert that cryptocurrency has turned into a store of value, although the development warrants monitoring," according to Hackett.

To make skeptics view Bitcoin as a substitute for gold, cryptocurrency must demonstrate a considerably extended and consistent track record of performance that shows little correlation—or parallel movement—with other high-risk investments, according to Rose from StoneX.

In the last month, Bitcoin saw an increase of 7.1%, whereas the Dow Jones Industrial Average dropped by 6%, as reported by FactSet. Meanwhile, the ICE U.S. Dollar Index, which gauges the dollar’s performance relative to a selection of foreign currencies, decreased by 4.7% over this timeframe.

Nevertheless, Bitcoin continues to lag behind gold, as futures for the yellow metal have surged by 11% in the last month. Continuous gold futures reached a new all-time peak on Tuesday and momentarily traded above $3,500 for the initial occurrence, when Bitcoin was still 14.5% beneath its peak of $109,225 reached on January 20th.

Driving the bitcoin rally

"I believe Bitcoin might have achieved a certain degree of institutional acceptance where people no longer see it primarily as a high-volatility technology stock, but rather begin to evaluate it based on its inherent worth," Rose stated. High-volatility stocks are those exhibiting more fluctuation in price compared to the broader market.

Last year’s launch of Bitcoin ETFs created new avenues for financial institutions to invest in cryptocurrency, and a potentially friendlier regulatory landscape might have contributed as well. encouraged institutional adoption .

As the uncertainty around Trump’s trade policy appeared to possibly tarnish the dollar’s status as a reliable “safe haven” and its role as the de facto global reserve currency, investors may be looking at bitcoin as a potential place to hide during market turbulence, Rose noted.

According to Rose, people will likely seek out an international asset that isn’t tied to any single country’s currency and can stand independently.

See: Deutsche Bank anticipates significant challenges looming for the U.S. dollar.

Certainly, various stories continue to influence Bitcoin's pricing, as stated by Joe McCann, who founded and serves as the chief investment officer at the crypto investment company Asymmetric.

McCann stated that according to him, Bitcoin could see advantages due to heightened liquidity, yet it’s improbable that it would be adversely affected by a downturn since unlike firms, it does not possess profits or monetary inflows.

Thus, if the Federal Reserve and other central banks lower their interest rates further to boost the economy, it could drive bitcoin up, regardless of how the global economy is doing, McCann added.

Traders involved with fed-funds futures continue to anticipate a greater than 96% chance that the Federal Reserve will implement at least two additional interest-rate reductions before the year concludes, as indicated by the CME FedWatch Tool.

On Thursday night, Bitcoin saw an increase of 0.1%, trading at $93,713. The stock market also closed strong on Thursday, with the Dow Jones IndustrialAverage climbing by 1.2%.