Bitcoin’s 8% Drawdown Shows Resilience Amid Market Turbulence

Bitcoin Shows Remarkable Stability Amid Market Turmoil Following Trump's Tariff Plans

  • Bitcoin has shown remarkable stability compared to traditional markets following Trump’s tariff plans, losing only 8% while stocks tumbled 15%.
  • According to Grayscale’s head of research, this performance suggests Bitcoin may benefit long-term from policies that could weaken the dollar’s position as a global reserve currency.
  • Bitcoin’s relative strength against tech stocks indicates a possible investor rotation from tech to commodity-like assets during market uncertainty.

Following President Trump’s “Liberation Day” tariff announcement on April 2, Bitcoin has demonstrated surprising resilience while traditional markets experienced severe downturns. While Bitcoin dropped 8% in value, this performance is being viewed positively by analysts as mainstream investments suffered significantly steeper losses.

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“I think this is the most bullish 8% drawdown I’ve ever seen in bitcoin,” said Zach Pandl, head of research at Grayscale, a leading crypto investment manager. The former Goldman Sachs analyst told CoinDesk that historically Bitcoin would be expected to have triple the volatility of the Nasdaq, yet while the tech-heavy index plunged 15%, Bitcoin’s losses were nowhere near the predicted 45% decline.

Bitcoin’s Surprising Stability

This relatively minor pullback suggests investors may view Bitcoin as a potential hedge during economic uncertainty. Pandl explained that while tariffs create short-term market risk, they could ultimately support Bitcoin adoption long-term. “It reflects that tariffs — while they are a short-term risk-off event for markets — are probably to be something that’s supportive for bitcoin adoption in the longer run,” he added.

The data shows Bitcoin is now stronger against the Roundhill “Magnificent 7 ETF” compared to a week ago, with investors able to purchase more of the tech-focused ETF with one Bitcoin than before, as reported by Decrypt.

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Potential Safe Haven Status

For Bitcoin advocates who view the cryptocurrency as a safe haven during uncertain times, the past week has been viewed as a positive test case. Pandl suggested that Bitcoin could benefit as investors seek alternatives to dollars during periods of stress.

“If you believe that the erosion of the dollar’s position is part of the bitcoin thesis, then your conviction in that thesis in the last week should have gone up,” Pandl said. He specifically pointed to stagflation concerns driving investors toward alternative assets: “Stagflation is going to be negative for stocks and bonds, and, historically, that has been positive for scarce commodities.”

Despite the recent price dip, Pandl maintains his optimism about Bitcoin’s medium-term outlook, expecting new all-time highs this year. “The price of bitcoin is down but conviction is up and there’s no need to change the medium term price outlook,” he concluded.

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