Bitcoin Gains Attention as a Hedge Amid Stock Market Turmoil

According to Cointelegraph, Bitcoin is drawing renewed interest as a potential hedge against financial instability following a historic downturn in the stock market. The S&P 500 experienced a record-breaking loss of $5 trillion in market capitalization over two days, marking its largest drop ever. This surpasses the $3.3 trillion decline witnessed in March 2020 during the initial COVID-19 pandemic wave, as reported by Reuters on April 5. The sell-off was triggered by U.S. President Donald Trump's announcement of reciprocal import tariffs on April 2, aimed at reducing the country's estimated $1.2 trillion trade deficit and boosting domestic manufacturing. Bitcoin's response to the tariff announcement was notably more stable compared to traditional markets, with a smaller dip, highlighting its growing maturity as a global asset. Marcin Kazmierczak, co-founder and chief operating officer of RedStone blockchain oracle firm, noted that this could signify an evolution in Bitcoin's market positioning. Historically, Bitcoin has been correlated with risk assets during macroeconomic shocks, but this divergence may indicate a shift in investor perception. Kazmierczak emphasized that Bitcoin's fixed supply architecture contrasts with fiat currencies, which may face inflationary pressures under tariff-driven economic changes. While traditional stocks plummeted, Bitcoin only dipped 3.7% over the same two-day period, trading at approximately $83,600 as of April 5, according to TradingView data. Despite the $5 trillion sell-off in traditional markets, Bitcoin maintained its value above the $82,000 key support level, suggesting that structural demand remains intact even amid forced selling and heightened volatility, as noted by Nexo dispatch analyst Iliya Kalchev. Despite Bitcoin's decoupling from traditional stocks, its initial price drop indicates that some investors still view it as a risk asset, according to James Wo, founder and CEO of venture capital firm DFG. Wo highlighted that with Bitcoin ETFs enabling greater institutional exposure, it is increasingly influenced by macroeconomic trends. However, if Bitcoin continues to demonstrate resilience amid ongoing uncertainty, its hard-capped supply and decentralized nature could bolster its 'digital gold' narrative and position it as a more reliable store of value. Analysts remain optimistic about Bitcoin's potential for the remainder of 2025, despite the current lack of momentum. Jamie Coutts, chief crypto analyst at Real Vision, projects that the growing money supply could drive Bitcoin's price above $132,000 before the end of 2025.