Bitcoin had an ink ring that played like a valuable store in April, in contrast to much of its history.
However, Bitcoin has further reflected the performance of speculative technology stocks since the beginning of the year.
Is Bitcoin’s property and value perceptions currently changing?
Bitcoin Stocks (Cryptography: BTC)-Facused Exchange Traded Fund Isles Bitcoin Trust ETF (NASDAQ: IBIT) According to data from S&P Global Market Intelligence, it rose 14.3% in April.
ibit is the most traded liquid Bitcoin ETF and is operated by BlackRock (NYSE: BLK)the world’s largest asset manager. IBIT is essentially a way of purchasing Bitcoin through traditional custody entities, whose value tends to accurately reflect the price of Bitcoin.
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Bitcoin, like gold, is often advertised as a store of value and hedge against geopolitical disasters and runaway inflation. However, Bitcoin has not actually traded that way in the past. Bitcoin performance typically reflects the performance of speculative technology stocks during past recessions.
However, the unique dynamics following the tariffs on April 2nd “liberation day” have now shown tips for Bitcoin’s actually differentiated performance against high-tech stocks.
Until April 2nd, Bitcoin had a rather terrible year, and in anticipation of the tariff announcement on April 2nd, it was performing relatively side-by-side with the NASDAQ Composite Index.
Interestingly, following the announcement of tariffs on April 2, Bitcoin collapsed, but not as much as tech stocks did. Then, from about April 8th to April 21st, Bitcoin was actually highly praised.
ibit data from ycharts
After April 2nd, some unusual things have happened. Long-term bond yields rose even as the dollar fell. Typically, as US government bonds rise, the dollar strengthens. However, after the tariff announcement, bonds rose, but the dollar fell. This was usually an emerging market phenomenon, and it was likely signaling international investors selling US assets as the US became viewed as a source of risk.
It’s probably not surprising that Bitcoin, which some consider to be a value alternative, has recovered, as the US Treasury Department probably doesn’t see as a safe haven and the dominance of the dollar in question.
The story continues
What’s interesting is that on April 22nd, Treasury Secretary Scott Bescent said there would be a “de-expansion” with China, and Stocks went through a major relief rally. Gold prices, which were highly valued all year round, fell slightly due to lower risk. But Bitcoin actually rallied alongside technology stocks.
So it appears that Bitcoin had the best in both worlds in April. It served somewhat as a hedge against weak dollars and US financial instability, but “risk-on” technology revived when trends reversed.
Bitcoin’s price action was seen in April, but while Bitcoin is unlikely to serve as both a “risk-off” hedge against the global economic disaster, it will not later display the “risk-on” characteristics of tech stocks either. The asset must actually display one characteristic. However, since Bitcoin is still a very young asset, investors may still be aware of its investment characteristics.
Also, when returning to the beginning of the year, it should be noted that Bitcoin is still mostly trending along with tech stocks and is significantly short on gold. Of note, traditionally, it has been hedges against global currency crisis and runaway inflation.
ibit data from ycharts
Therefore, April was definitely an interesting month for Bitcoin. It began to deviate somewhat from the tech stocks of performance and had an inkling that is considered a “safe shelter” against geopolitical disruption. However, as a decline in Bitcoin’s performance compared to gold since the beginning of the year, Bitcoin is probably not yet at that level. Currently, Bitcoin has functioned to some extent between tech stocks and gold dichotomy assets.
Consider this before purchasing shares on iShares Bitcoin Trust.
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Billy Duberstein and/or his clients have a Bitcoin position. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
