Bitcoin is nearing $89,000 while traditional markets slump. This showcases Bitcoin’s emerging role as a hedge against US Treasury and TradFi risks. On Monday, the S&P 500 and Nasdaq extended their declines.
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— Binance (@binance) April 20, 2025
This highlights a divergence in performance between crypto and equities. The selloff in equities came amid heightened political tension and renewed concerns over the economy. President Donald Trump escalated his criticism of Fed Chair Jerome Powell.
So far this month, $MSTR treasury operations have delivered a BTC $ Gain of $459 million to @Strategy shareholders. pic.twitter.com/ZHqzX01XS6
— Michael Saylor (@saylor) April 21, 2025
“Powell’s termination cannot come fast enough!” the President posted on Truth Social. He hinted at a review of the Fed’s policy. The Dow Jones Industrial Average plunged 971.82 points (2.48%) to 38,170.41.
$MSTR has acquired 6,556 BTC for ~$555.8 million at ~$84,785 per bitcoin and has achieved BTC Yield of 12.1% YTD 2025. As of 4/20/2025, @Strategy holds 538,200 $BTC acquired for ~$36.47 billion at ~$67,766 per bitcoin. https://t.co/YxUq6mHzca
— Michael Saylor (@saylor) April 21, 2025
Nasdaq Composite fell 2.55% to 15,870.90. The S&P 500 dropped 2.36% to close at 5,158.20. Major tech stocks were hit hardest.
The question isn’t “why is Bitcoin pumping.”
The question is “why wasn’t Bitcoin pumping.”
NgU is the default state.
— Samson Mow (@Excellion) April 21, 2025
Tesla sank 5.8%. Nvidia slid more than 4%. Amazon and Meta both dropped around 3%.
Meanwhile, Bitcoin is bucking the trend. It is steadily approaching the $89,000 threshold. A decisive move above this level could see Bitcoin hit the $90,000 target.
Bitcoin’s role as financial hedge
Historically, Bitcoin’s performance has shown an inverse correlation with the US Dollar Index (DXY). This prompts speculation that a pivotal moment for Bitcoin may be on the horizon.
“The DXY has broken down to March 2022 levels. Bitcoin is back on the move,” analyst Ben Werkman notes. Some analysts suggest Bitcoin’s resilience signals a shift in how investors perceive the digital asset.
They believe that Bitcoin is increasingly viewed as a hedge against risks in TradFi and US Treasuries. According to Bitwise Europe, the firm’s proprietary Cryptoasset Sentiment Index has flipped to a “slightly bullish” reading. “At the moment, 8 out of 15 indicators are above their short-term trend.
Exchange inflows and the BTC funding rate have both improved since last week,” Bitwise analysts report. Bitwise also noted a continued high correlation between Bitcoin and altcoins. This suggests that a surge in Bitcoin’s price could spill over to other tokens.
On the TradFi side, Bitwise reported a marginal uptick in Cross Asset Risk Appetite (CARA). It rose from -0.59 to -0.43. This renewed interest aligns with the view that Bitcoin’s primary purpose in a portfolio is as a hedge.
It hedges against risks to the existing financial system. This covers both private sector risks like the March 2023 SVB collapse and government sector risks such as US Treasury risks. The analysis underscores the growing perception of Bitcoin as a robust hedge.
It hedges against both traditional financial market volatility and governmental fiscal uncertainties. With Bitcoin nearing $89,000 against the backdrop of troubled traditional markets, it is increasingly being seen as a beacon of stability in uncertain times.