Bitcoin made the victory headline after winning the Trump election, but ended the first quarter of 2025 in red. Since the beginning of 2025, Bitcoin has registered instability and has been overwhelmed by speculation that the Fed may have limited scope for further interest rate cuts (read: Top ETF Stories for Q1 2025).
In early March, there was an executive order by Donald Trump to establish a strategic Bitcoin reserve for the US. This reserve is currently not planned by the US government to purchase additional Bitcoin. Investors have found the move to be overwhelming.
Recent market volatility and wider risk-off environment due to Trump trade tensions have caused a 25% drawback in Bitcoin from an all-time high of $109,000 in 2024. Despite this recession, many investors see this as a purchase opportunity.
SPDR S&P 500 ETF Trust Spy has lost 5.6% in the past month and has only added 0.2% in the past week (as of April 10, 2025). Meanwhile, Bitcoin has won 2.1% in the past month and has risen 3.7% in the past week. It shows that Bitcoin is showing strong resilience amidst the turmoil of a tariff-driven market.
Fed Chair Powell labeled Bitcoin as “virtual gold and digital gold,” while billionaire investor Ray Dario advised people to invest in hard assets like gold and Bitcoin to avoid the impact of the looming debt crisis (read: Is Bitcoin digital gold?
Bitcoin is often advertised as a hedge against inflation and has a fixed supply. This move is in contrast to traditional Fiat currency, where central banks can issue unlimited amounts. Therefore, during inflation, the value of Fiat currency tends to decline.
Bitcoin, on the other hand, can maintain its wealth amidst high inflation due to limited supply. In any case, Trump’s high import duties are expected to blow out inflation worldwide. Therefore, Bitcoin should do well in such an inflation environment.
MicroStrategy MSTR has long been a child of corporate Bitcoin adoption posters, but it is no longer alone. GameStop GME, Semler Scientific and Rumble Rum recently began accumulating Bitcoin as part of their balance sheet strategy. These new entrants are likely to strengthen institutional adoption, creating general purchasing pressure in the market.
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