While it may not feel like it for some investors, Bitcoin has proven to be a relatively wise choice in light of President Trump’s recent tariff announcements, which led to substantial losses in conventional markets. Since the “Liberation Day” declaration on April 2, traditional stocks and other investment avenues have plummeted, whereas Bitcoin has endured a pullback of just 8% in value.
“This is perhaps the most optimistic 8% drop I’ve ever seen for Bitcoin,” remarked Zach Pandl, who leads research at Grayscale, a prominent cryptocurrency investment firm.
According to historical trends, Bitcoin typically exhibits three times the volatility of the Nasdaq, Pandl noted. However, while the Nasdaq dropped by 15% at the start of trading on April 8 (compared to April 2), Bitcoin did not even come close to a 45% decrease.
In essence, an 8% drop is actually favorable, as historical trends pointed to a much larger decline.
“Investors in the crypto space should be quite happy with this slight decrease in Bitcoin,” Pandl, a former analyst at Goldman Sachs, conveyed.
“It shows that tariffs—though they pose a short-term risk to markets—are likely to support Bitcoin’s adoption over the long haul. I think this relatively small drawdown demonstrates that,” he further explained.
Pandl is optimistic about Bitcoin’s future, especially as the dollar potentially loses its status as the world’s predominant reserve currency.
“Stagflation is generally detrimental for stocks and bonds, but historically, it has been beneficial for scarce commodities. Those anxious about stagflation are seeking alternative investments that can yield returns. In conventional finance, this might mean gold or copper, and certainly Bitcoin,” he said.
Pandl suggests that Bitcoin’s solid performance points to a broader shift away from large-cap tech stocks towards commodity-focused assets like Bitcoin. This shift is reflected in Bitcoin’s performance relative to the Roundhill “Magnificent 7 ETF,” where you can now acquire a larger quantity of that ETF with a single Bitcoin compared to a week earlier.
For those adhering to the long-term investment philosophy of Bitcoin as a safe haven during uncertain times, recent developments have validated that belief, asserting that Bitcoin should gain traction as investors search for alternatives to the dollar amid stressful periods.
“If you believe that the dollar’s weakening position aligns with the Bitcoin narrative, then your confidence in that stance should have increased in the past week,” Pandl asserts.
He anticipates a rise in Bitcoin’s price in the medium term, possibly hitting new record highs within the year.
“Bitcoin’s market value may be lower, but investor conviction is higher, and there’s no reason to alter the medium-term price outlook,” he concluded.