March was a month of notable volatility for Bitcoin. It began trading near $90,000 but saw a rapid decline, dropping below $80,000 by the middle of the month. This 10% downturn occurred amid rising worries about geopolitical issues, aggressive US trade measures, and overall economic instability.
The fluctuations in Bitcoin’s price mirrored a broader sense of risk aversion, as global equity markets also experienced downturns during this time. However, by the latter part of March, Bitcoin regained some traction, stabilizing in the range of $82,000 to $85,000 as market fears began to ease.
The turbulence had a marked effect on the Coinbase Premium Index, a commonly used indicator of US investor sentiment. When the premium is positive, it indicates stronger demand from US investors, while a negative premium points to weaker demand compared to international markets. Throughout March 2025, the index predominantly displayed negative values, signaling diminished demand from US investors.
This index measures the difference in Bitcoin’s trading price on Coinbase compared to other significant exchanges like Binance, Bitstamp, and OKX. Given Coinbase’s extensive US customer base, the index effectively reflects the sentiment and actions of American investors.
An increasing premium typically suggests strong buying activity among institutional or retail investors in the US, whereas a declining or negative premium indicates a tendency among domestic investors to sell their Bitcoin or show less interest than their global counterparts.
A number of US-specific factors contributed to the consistently negative readings of the Coinbase Premium Index throughout March. The decision to impose a 25% tariff on imports from Mexico and Canada and a 10% tariff on goods from China added new uncertainty to financial markets.
These policies raised concerns about increasing costs for US businesses and consumers, which in turn dampened investor sentiment. As traditional markets declined in response to these trade tensions, risk assets like Bitcoin experienced greater volatility, prompting US investors to reduce their stake in speculative assets.
In early March, both the S&P 500 and Nasdaq entered correction territory, dropping over 10% from their peaks in February. This sharp decline likely led many investors to liquidate their Bitcoin holdings to offset losses elsewhere or to raise cash amidst a waning risk appetite. Consequently, Coinbase prices fell relative to global exchanges.
Despite the overall negative trend, the Coinbase Premium Index saw a brief increase into positive territory on March 14 and 15, rising from approximately +1% to +2%. This uptick coincided with a temporary stabilization in Bitcoin’s price as it found support around the $80,000 level.
The Federal Reserve’s decision to maintain interest rates without signaling imminent increases offered a momentary reprieve to financial markets. While broader concerns remained, this perceived stability led some US investors to begin buying the dips in risk assets like Bitcoin, causing Coinbase prices to momentarily climb.
However, this positive momentum was short-lived. By March 16, the index reverted to negative territory as macroeconomic uncertainties persisted.
The sustained negative premium underscored a risk-averse atmosphere where American investors were less inclined to accumulate Bitcoin, especially amid escalating trade tensions, a volatile stock market, and stagnant monetary policy.
The temporary spike in premium during mid-March indicated a brief shift in sentiment related to favorable short-term forecasts in financial markets. Nonetheless, this optimism quickly dissipated against an unstable macroeconomic backdrop. The data demonstrates that while Bitcoin operates independently of conventional markets in certain aspects, it remains influenced by economic and geopolitical trends—particularly those in the US.