The notion of “decoupling” has resurfaced, though not quite in the manner that bitcoin enthusiasts would prefer.
Despite the absence of a “Black Monday” in the U.S., stocks are surging upward on Tuesday, while bitcoin is taking a downturn.
About two hours into the U.S. trading session, the Nasdaq has gained 3%, with the S&P 500 following closely behind. However, bitcoin, which briefly climbed back above $80,000, has dropped to just above $78,000, nearing its jittery low from the weekend in the vicinity of $75,000.
This stock rebound follows several days of unprecedented losses triggered by sweeping tariff proposals announced by the former president last Wednesday evening. A few positive developments are aiding the recovery, including an announcement about a potential trade agreement with South Korea and optimistic projections regarding the U.S. stance toward China from Treasury Secretary Scott Bessent.
The uptick in stocks is being felt globally, with European markets rising by around 3% as their trading day closes, while Japan’s Nikkei index sees a 6% increase.
What’s driving this divergence?
A straightforward explanation for the divergent trends is to take a step back and look at the broader picture. Bitcoin has seen a decline of approximately 9% since the president’s tariff announcement on Wednesday, which closely mirrors the Nasdaq’s nearly 8% drop in the same period.
Looking further back, despite having lost nearly 30% from its all-time high in mid-January, bitcoin remains up about 14% since the elections last November, while the Nasdaq has slid by nearly 10% during that timeframe.