The cryptocurrency markets have shown a surprising degree of stability amidst the broader chaos spurred by the fluctuating global tariffs imposed by U.S. President Donald Trump, as noted by an analyst from a digital investment firm.
“In spite of the devastation seen in traditional financial markets, the crypto space has remained relatively calm,” the global head of research stated in an April 11 report. “Historically, during broader risk-off trends, we typically witness stresses manifesting in crypto markets. Thus far, that hasn’t occurred.”
The analyst pointed out that perpetual futures rates in cryptocurrency have “remained consistently positive,” with a spike in liquidations occurring on April 6 and 7 following Trump’s initial tariff announcement on April 2. However, liquidations totaled just $480 million, which he remarked was significantly lower than other significant liquidation events in the past.
He also observed that the price of Tether (USDT), a popular stablecoin pegged to the U.S. dollar and widely utilized in crypto trading, dipped below $1 but had “not seen a drastic drop.”
On April 2, Trump introduced an extensive tariff plan that encompassed various tariffs across different countries but later paused its implementation for 90 days, just hours after its activation on April 5. Instead, a base tariff of 10% was placed on most countries, with China facing tariffs as steep as 145%.
Following Trump’s announcement, both traditional and cryptocurrency markets plummeted, and numerous assets have yet to return to pre-announcement levels.
Volatility in stocks, bonds, and foreign exchange markets surged following the announcement of tariffs. Source: Digital investment firm
Over the weekend, the Trump administration further muddied the waters regarding the tariffs, revealing on April 13 that a prior decision to exempt many electronic goods from tariffs was only temporary, meaning they would face levies after all.
Bitcoin remains relatively resilient, with decreasing volatility making it attractive
The analyst noted that Bitcoin (BTC) has not been immune to market fluctuations, but “at current prices, it has performed significantly better than many other asset classes.”
He added that Bitcoin’s volatility has not spiked to historical highs, unlike traditional markets, and has “remained quite stable” despite the uncertainty triggered by the Trump administration.
“It’s possible that investors are more frequently seeking assets that are not tied to specific nations, thus avoiding the repercussions of trade conflicts.”
Though Bitcoin is down 22.5% from its mid-January peak of over $108,000, it has remained flat in the last 24 hours at around $84,730, as reported by a cryptocurrency data website.
The analyst remarked that the diminishing disparity between Bitcoin’s volatility and that of other assets makes it “increasingly attractive” to funds using risk parity strategies, which determine asset allocations based on risk factors.
He suggested that investors might be lowering their overall risk exposure, with “possibly some reallocating of assets toward Bitcoin contributing to its resilience.”
Related: S&P 500 briefly experiences volatility akin to Bitcoin amid tariff conflicts
“Allocating Bitcoin within risk parity funds could help stabilize its volatility—enhancing the asset’s appeal and fostering a positive cycle of increased adoption and stability,” the analyst stated.
Nevertheless, the head of markets at a crypto platform expressed concerns in an April 12 note. He pointed out that despite a general market rebound, “technical indicators are signaling troubling signs.”
He highlighted the potential formation of a “death cross,” where the 50-day moving average dips below the 200-day moving average, occurring in Bitcoin and the S&P 500.
This pattern is generally seen as a bearish indicator for the medium term, suggesting that markets may struggle to maintain upward momentum without a definitive catalyst or a series of favorable macroeconomic events.
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