Cryptocurrency markets have remained relatively calm despite broader market distress triggered by US President Donald Trump’s “on-again, off-again” comprehensive global tariffs, as noted by a New York Digital Investment Group (NYDIG) analyst.
“In spite of the devastation in conventional financial markets, the cryptocurrency markets have been quite orderly,” stated NYDIG global research head Greg Cipolaro in a note dated April 11. “Historically, in extensive risk-averse movements, we often observe pressures emerge in cryptocurrency markets. So far, we haven’t witnessed that.”
Cipolaro remarked that cryptocurrency perpetual futures rates have “remained persistently positive,” noting that liquidations surged on April 6 and 7 following Trump’s initial tariff announcement on April 2, but totaled merely $480 million, which he emphasized “was considerably lower than other significant liquidation episodes.”
He observed that the price of Tether (USDT), a stablecoin linked to the US dollar and commonly utilized in cryptocurrency trading, was under $1 but had “not undergone a sharp fall.”
On April 2, Trump introduced an extensive tariff regime affecting various levies on every nation before suspending them for 90 days just hours after implementation on April 9, instead opting for a base tariff of 10%, excluding China, which faces tariffs as high as 145%.
Both traditional and cryptocurrency markets plummeted after Trump’s tariff announcement on April 2, with numerous assets failing to rebound to pre-announcement levels.
Volatility rates for stocks, bonds, and foreign exchange surged following Trump’s tariff announcement. Source: NYDIG
Over the weekend, the Trump administration created further confusion regarding its tariffs, revealing on April 13 that a previous decision on April 11 to exempt several electronics from tariffs was temporary and they would still be subject to levies.
Bitcoin performs well, decreasing volatility to enhance its appeal
Cipolaro indicated that Bitcoin (BTC) did not escape the market fluctuations, “but at current values has outperformed many other asset categories.”
He mentioned that Bitcoin’s volatility has not escalated to historic highs, unlike traditional markets, and “has remained fairly stable” despite the turmoil instigated by the Trump administration.
“Perhaps investors are increasingly looking for stores of value that are not linked to sovereign nations and thus unaffected by trade disputes.”
Bitcoin has decreased by 22.5% from its mid-January high of over $108,000 and has remained unchanged over the past 24 hours at $84,730, according to CoinGecko.
Cipolaro mentioned that the diminishing disparity between Bitcoin’s volatility and other assets renders it “increasingly more attractive” to funds with risk parity portfolios — those that utilize risk considerations to determine asset allocations.
He noted that investors are likely minimizing their risk exposure but “perhaps reallocating part of their asset mix to Bitcoin is one of the factors behind its resilience.”
Related: S&P 500 briefly witnesses ‘Bitcoin-level’ volatility amid Trump tariff conflict
“Risk parity funds investing in Bitcoin can help reduce its volatility — enhancing the asset’s attractiveness and potentially reinforcing a self-perpetuating cycle of increased adoption and stability,” Cipolaro stated.
Nevertheless, YouHodler market chief Ruslan Lienkha informed Cointelegraph in an April 12 note that despite a broader market recovery, “technical indicators present a worrisome outlook.”
He mentioned a “death cross,” which occurs when the 50-day moving average crosses below the 200-day moving average, may be forming on Bitcoin and the S&P 500.
Lienkha explained that this pattern is “generally viewed as a bearish signal for the medium term, indicating that markets might struggle to maintain upward momentum without a definitive catalyst or a series of favorable macroeconomic developments.”
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