Bitcoin skyrocketed past $88,500 this week, defying plunging stock markets as investors increasingly treat it as a haven akin to gold. This was followed by the U.S. dollar slumping to multi-year lows, and global trade tensions intensified. Analysts now question whether Bitcoin’s break from stock market correlations signals a lasting shift in its role.
Bitcoin’s Stock Market Divergence Accelerates
Bitcoin climbed 2.3% in 24 hours, hitting $86,800 as major indices like the S&P 500 and Nasdaq plummeted over 3%. Gold simultaneously reached a record $3,430 per ounce, underscoring demand for non-traditional assets. This decoupling marks a stark reversal from 2022, when Bitcoin often mirrored tech stocks. “Technology stocks have gotten crushed,” noted The Kobeissi Letter on X, emphasising that markets “cannot bottom” without sector leaders like Nvidia rebounding.
This was followed by the U.S. Dollar Index (DXY) sinking below 99, its lowest since March 2022. Investors appear to prioritise assets insulated from geopolitical risks and central bank volatility.
Trade War Fears Reshape Global Markets
Escalating U.S.-China tensions and Japan’s criticism of American trade policies rattled equities this week. President Donald Trump compounded fears by attacking Federal Reserve Chair Jerome Powell, demanding immediate rate cuts to “save” the economy. Markets interpreted the rhetoric as destabilising, accelerating sell-offs.
Bitcoin, however, thrived amid the chaos. Analysts linked its rise to gold’s rally, suggesting both benefit from perceived safety. “Markets need trade deals ASAP,” warned The Kobeissi Letter, noting parallels between Bitcoin’s surge and the dollar’s freefall.
Institutional Investors Eye Bitcoin Revival
After weeks of outflows, U.S. spot Bitcoin ETFs saw $13.4 million in net inflows last week, a dramatic rebound from $708 million in withdrawals. Trading firm QCP Capital called this a sign of “returning institutional confidence,” citing balanced options market activity. Risk reversals, which previously favoured bearish bets, flattened as optimism grew.
“The narrative of BTC as a safe haven is gaining traction,” QCP wrote, suggesting renewed interest could drive further gains. Gold’s record-breaking rally lent credibility to Bitcoin’s hedge narrative, even as skeptics urged caution.
Bitcoin Defies Stock Market Volatility
While the S&P 500 and Nasdaq sank 3% this week, Bitcoin held near $87,000, a resilience experts called unprecedented. Lawrence McDonald, ex-Societe Generale strategist, highlighted Bitcoin’s stability despite a volatility index (VIX) near 30: “This is a strong sign of a maturing market.”
Crypto-linked stocks like Coinbase and MicroStrategy dipped slightly, but miners faced steeper losses. Marathon Digital and Riot Platforms fell 3%, contrasting Bitcoin’s steady climb. Gold’s parallel rise fuelled debates over whether both assets now share a “safe haven” label.
Trump-Powell Feud Adds Fuel to Fire
President Trump’s latest broadsides against Fed Chair Powell intensified market uncertainty. On Truth Social, Trump labelled Powell a “major loser” and pushed for immediate rate cuts, contradicting Fed warnings about premature easing. Legal experts argue Trump cannot legally remove Powell before his term ends in 2026, but the threats unsettled investors.
Simultaneously, Trump’s tariff policies sparked global retaliation fears, pressuring equities. Bitcoin’s rally, analysts noted, coincided with this political turbulence, a pattern reminiscent of gold’s historical response to crises.
Is Bitcoin the New Gold?
“Was today’s rally just holiday noise, or a seismic shift in Bitcoin’s role?” asked QCP Capital. With European markets closed for Easter, clarity may take days. Still, Bitcoin’s correlation to gold and divergence from stocks have traders watching closely.
McDonald urged investors to “sell gold for Bitcoin,” citing its unmatched resilience. Meanwhile, the dollar’s slide and Treasury yield fluctuations suggest deeper macroeconomic anxiety. As trade war risks mount, Bitcoin’s performance could redefine its place in portfolios.
What Comes Next?
Bitcoin’s break from stock market trends marks a critical test of its maturity. While skeptics dismiss the rally as speculative, proponents see a hedge against fiat and geopolitical risks. For now, all eyes remain on Fed policy, trade negotiations, and Bitcoin’s ability to sustain its momentum. As the dollar wobbles and gold soars, the cryptocurrency’s next move could shape its reputation for years.
