Update (April 16, 10:44 am UTC): This article has been updated with comments from Stan Novi and Tomas Fanta.
Bitcoin is showing growing resilience to macroeconomic headwinds compared with traditional financial markets, according to an April 14 report from crypto market maker Wintermute.
The report noted that Bitcoin (BTC) has held up relatively well during the ongoing market downturn, even as the S&P 500 and Nasdaq dropped to their lowest levels in a year and bond yields surged to highs that had not been seen since 2007.
“Bitcoin’s decline was comparatively modest, revisiting price levels from around the US election period,“ Wintermute wrote.
According to Wintermute, “This marks a notable shift from its historical behavior in crisis situations.” In the past, Bitcoin’s losses were considerably greater than those of traditional finance indexes. The shift highlights Bitcoin’s “apparent growing resilience amid macroeconomic turbulence.“
The opinion of crypto market experts
Founder of Obchakevich Research, Alex Obchakevich, told Cointelegraph that he expects this to be a temporary trend:
“As the trade war intensifies, Bitcoin may return to the list of risky assets. Because investors will most likely look for salvation in gold.“
Obchakevich said that factors that caused the stability of Bitcoin were growing institutional interest through exchange-traded funds (ETFs) and the promotion of Bitcoin as digital gold due to its decentralization and independence.
Stan Novi, co-founder of Fibonacci Market Maker, told Cointelegraph that this change is a “structural shift” for Bitcoin. The market is now treating the world’s first cryptocurrency “less like a speculative tech trade and more like a macro asset with real staying power.” According to Novi, Bitcoin being more stable in times of macroeconomic turmoil is a symptom of this change:
“In past cycles, risk-off meant crypto-off. Today, that correlation is weakening, and that’s a big deal.“
Tomas Fanta, principal at Web3 investment firm Heartcore, told Cointelegraph that “Bitcoin’s shifting dynamics are driven primarily by broader mainstream acceptance, with Bitcoin at the forefront.” Much like Obchakevich, he also highlighted the importance of spot Bitcoin ETFs:
“The launch of spot Bitcoin ETFs and proposals for strategic BTC reserves have legitimized Bitcoin in the eyes of both institutions and retail investors, making it a popular diversification tool, even among those outside the traditional crypto community.“
Novi agreed. He said that a catalyst for the change is “institutional infrastructure is finally catching up,” which includes spot ETF approval, increasing regulatory clarity and better execution venues. All of those changes “have opened the floodgates to serious capital.
He added that the holder base is also increasingly long-term in its vision, and “smarter, stickier money” is pouring into the market. Novi expects that if trade tensions continue to lead to higher inflation, “Bitcoin has a very real shot at proving itself as a modern hedge.”
Related: Bitcoin traders target $90K as apparent tariff exemptions ease US Treasury yields
A change in Bitcoin market dynamics
Over the past week, Bitcoin’s price increased by 7% to $83,700 — later reaching nearly $86,000 at the time of publication. This growth occurred as the Consumer Price Index (CPI) rose by 2.4% year-over-year, with a month-over-month decline of 0.1% — the first monthly decrease since May 2020. This signals that inflation is cooling off.
Year-over-year CPI percentage change. Source: US Bureau of Labor Statistics
Furthermore, the Producer Price Index (PPI) rose 2.7% year-over-year in March. The same metric stood at 3.2% in February, also showing signs of disinflationary pressures. Still, according to Wintermute, the trend may soon reverse:
“Despite this progress toward the Fed’s 2% inflation target, the recent escalation in global trade tensions introduced new potential inflationary risks, which are not yet reflected in March’s data.”
Monthly PPI percentage change. Source: US Bureau of Labor Statistics
Related: Trade wars could spur governments to embrace Web3 — Truebit
More market turmoil expected
Bitwise analyst Jeff Park recently argued that US President Donald Trump’s trade policies will create worldwide macroeconomic turmoil and short-term financial crises that will ultimately lead to greater adoption of Bitcoin. He said that we should expect an inflation increase:
“The tariff costs, most likely through higher inflation, will be shared by both the US and trading partners, but the relative impact will be much heavier on foreigners. These countries will then have to find a way to fend off their weak growth issues.”
Wintermute explained that the ongoing trade war heightens the risk of increased inflation and economic slowdown. Prediction market Kalshi traders recently placed the odds of a recession hitting the US this year at 61%, and JPMorgan sees a 60% likelihood.
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