Bitcoin (BTC)’s recent stability amid the Nasdaq turmoil promoted by tariffs has created excitement among market participants regarding the potential of cryptocurrency as an asset for shelter.
Still, the Bulls may want to keep an eye on the bond market. The dynamics that characterize the March 2020 COVID conflict could emerge in the bond market.
NASDAQ, a Wall Street high-tech index known to be positively correlated with Bitcoin, has fallen 11% since President Donald Trump announced mutual tariffs on Wednesday on 180 countries, widening trade tensions and portraying retaliatory taxes from China.
Other US indexes and global markets have been assaulted along with sudden losses and gold pullbacks in risky currencies such as the Australian dollar.
BTC is largely stable, continuing to trade over $80,000, and its resilience is seen as a sign of evolution into macro hedges.
“This week, the S&P 500 has dropped by about 5% this week as investors support trade-driven revenue headwinds. Bitcoin has shown impressive resilience,” he said. “After temporarily immersing under $82,000, it quickly rebounded, strengthening its position as a macrohedge in an era of macroeconomic stress. Its relative strength could continue to attract institutional influx if widespread market volatility persists.”
The recognition of stability quickly transformed into a self-fulfilling prophecy, cementing BTC’s position as a Haven Asset for years to come, as pointed out by X.
However, it cannot be reduced in the short term, especially as “financial market-based trade” faces risks due to rising turbulent bond prices.
The basic transactions include highly leveraged hedge funds reportedly operating at a 50-1 leverage ratio, taking advantage of a mild price discrepancy between the Treasury futures and securities. The trade exploded in mid-March 2020, threatening the coronavirus to derail the global economy, leading to a “dash for cash” in which investors sell almost all their assets for dollar liquidity. On March 12, 2020, BTC fell nearly 40%.
“When market volatility spikes – like it now – it unearths highly utilized carry trades vulnerable to large-scale market movements. The US financial market explosion in March 2020 is an example of recent fares.
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