(Bloomberg) — Bitcoin has surged past gold and tech stocks alike in April, rekindling the debate over whether the largest cryptocurrency serves as a refuge from market turmoil such as the strife triggered by sweeping US tariffs.
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President Donald Trump’s announcement of reciprocal tariffs on April 2 — what he referred to as “Liberation Day” — sent shockwaves across global markets. The Nasdaq Composite is down 0.2% since the day before, while the Bloomberg Dollar Index slipped around 4%. Gold, a go-to refuge in periods of uncertainty, rallied to a record high of $3,500 an ounce before paring some gains, to return 6.1%.
Bitcoin, however, posted a roughly 12% increase since April 1, with advocates saying it acted as an alternative hedge amid growing concerns over US fiscal policy and institutional stability.
The initial reaction to the tariffs saw Bitcoin move lower alongside risk assets, mirroring sharp declines in US equities. But the cryptocurrency soon diverged, rallying sharply as long-dated Treasury yields climbed and investors sought protection from escalating policy risks. Rising concerns about the independence of the Federal Reserve and the credibility of US economic policy has led investors seek refuge in the Swiss Franc, Euro, Gold and and finally trickling down to Bitcoin.
David Lawant, head of research at FalconX, cautioned against reading too much into Bitcoin’s recent divergence from risk assets, noting it’s based on just a few trading sessions. “Decoupling” implies a breakdown in correlation, but Bitcoin’s 30-day correlation with major equity indices is still around 0.6 — far from low, he said.
What stands out more, Lawant added, is Bitcoin’s unusually low beta during recent market stress, suggesting investors are beginning to view it as a more mature, long-term asset.
In April, investors have poured about $2.9 billion into US-listed Bitcoin spot exchange-traded funds, marking a sharp reversal from March and February, when the funds saw net outflows of $811 million and $3.6 billion, respectively.
Geoff Kendrick, global head of digital assets research at Standard Chartered, said in a recent note that he expects a “strategic asset reallocation away from US assets” to fuel Bitcoin’s next rally. He views Bitcoin as a hedge against risks to the financial system, noting it may be “more effective” than gold due to its “decentralized nature.”
