Bitcoin is increasingly resilient during market downturns, according to Wintermute. Despite the S&P 500 and Nasdaq dropping significantly, Bitcoin has only shown modest declines, reflecting a shift in its response to economic crises. Factors like institutional ETF interest and its status as digital gold support its stability. Analysts remain cautious due to upcoming trade wars and potential inflation threats, predicting the risk of recession to be significant.
According to a report from Wintermute dated April 14, Bitcoin is demonstrating increased resilience against macroeconomic pressures compared to traditional financial markets. While indices like the S&P 500 and Nasdaq have experienced significant declines, Bitcoin (BTC) has held its ground more effectively, revisiting price levels consistent with those around the US election period. This shift indicates Bitcoin’s evolving resilience amid economic turmoil, contrasting with its historically larger losses during crises.
Alex Obchakevich, founder of Obchakevich Research, predicts that this trend may be temporary, owing to the intensifying trade war which may reclassify Bitcoin as a risky asset. He anticipates that investors will revert their focus to gold for stability, rather than cryptocurrencies. Factors contributing to Bitcoin’s current stability include increasing institutional interest through exchange-traded funds (ETFs) and its positioning as digital gold, primarily due to its decentralised nature.
Over the past week, Bitcoin’s price surged by 7% to approximately $83,700, reaching near $86,000 at the time of reporting. This price increase coincides with a year-over-year rise in the Consumer Price Index (CPI) of 2.4% and a month-over-month decrease of 0.1%, indicating a cooling inflation trend. The Producer Price Index (PPI) also showed an increase of 2.7% year-over-year in March, down from 3.2% in February, highlighting disinflationary signals, though potential reversals in these trends loom.
Market analysts, like Bitwise’s Jeff Park, expect that ongoing trade tensions and US President Donald Trump’s policies will induce global macroeconomic instability, potentially increasing Bitcoin’s adoption. Park noted that tariff costs might drive inflation higher, affecting both the US and its trading partners, with a more significant burden on foreign countries struggling with weak economic growth. Moreover, consensus among traders places a 61% chance of a US recession this year, with JPMorgan assessing similar odds.
