Bitcoin’s recent performance shows it acting more like a store of value, according to NYDIG. As the asset gained over 13% since April, it appears to be decoupling from traditional risk assets amidst US political turbulence. Economists note alternatives to traditional finance remain limited, while warnings of a market overheating persist.
Bitcoin is increasingly being recognised as a store of value, as per insights from the New York Digital Investment Group (NYDIG). According to Greg Cipolaro, the firm’s global head of research, Bitcoin is showing a noticeable shift amid recent US risk-off sentiment due to political chaos. In a market note dated April 25, he notes this week’s trading has felt different, suggesting a potential decoupling from traditional assets.
Cipolaro mentioned that Bitcoin has gained over 13% so far in April. In contrast, key US markets such as the S&P 500 and the tech-heavy Nasdaq faced declines, largely due to increasing trade tensions ignited by President Trump’s recent tariff announcements. The tariffs, introduced on April 2, impact all countries at varying rates, further complicating the economic landscape.
Interestingly, the US dollar and long-term US Treasuries have also struggled since these tariff discussions began. Meanwhile, traditional safe havens like gold, and currencies such as the Swiss franc, have strengthened. Cipolaro asserts Bitcoin’s role is evolving, positioning itself as a non-sovereign store of value amid financial instability.
With rising volatility in the equities market, investors are actively seeking reliable safe havens. According to Cipolaro, they are also exploring alternatives beyond the US financial system—this includes an interest in commodities, bonds, stocks, and forex, as traditional options become less appealing.
However, there remains a notable limitation: those looking for alternatives to conventional financial channels find their options limited. Gold dominates as a non-sovereign asset with a market cap of approximately $22 trillion, while Bitcoin trails significantly behind at $1.8 trillion. Also, it’s interesting to note that Bitcoin is uniquely focused on monetary use cases compared to other major cryptocurrencies that typically serve as fuel for decentralised applications.
Despite Bitcoin’s impressive gains, Cipolaro reassured investors that indicators of an overheating market are few and that the current recovery appears to be in its infancy, emphasising a careful approach moving forward.
Ultimately, as Bitcoin begins to assert itself as a credible store of value, it will be interesting to see how it evolves in relation to other established financial assets in the coming months.
