Bitcoin Gains 13% As Safe Haven Amid US Trade Tensions

Bitcoin has begun to exhibit characteristics of a store of value during periods of heightened uncertainty in the US, marking a potential shift in its relationship with traditional assets. According to the New York Digital Investment Group, Bitcoin's behavior has noticeably changed over the past few weeks, decoupling from traditional risk assets and acting more like a non-sovereign issued store of value.

Greg Cipolaro, the global head of research at NYDIG, observed that Bitcoin has gained more than 13% since the beginning of April, while US markets such as the S&P 500 and tech-heavy Nasdaq have declined. This divergence is attributed to escalating global trade tensions due to US President Donald Trump’s tariffs. The US dollar and long-term US Treasurys have also underperformed since Trump’s April 2 “Liberation Day” tariff announcements, which imposed various rates on different countries, with the minimum rate being 10%.

In times of surging volatility in equities, foreign exchange rates, and interest rates and bonds, investors have been seeking safe haven assets. Gold and currencies such as the Swiss franc have been consistent winners, and Bitcoin is emerging as a non-sovereign store of value. Cipolaro noted that investors are also seeking alternatives to US hegemony, whether that is stocks, bonds, forex, or commodities. However, there are few large, liquid options outside traditional financial systems. Gold remains the largest non-sovereign store of value at around a $22 trillion market cap, while Bitcoin has just a fraction of that at $1.8 trillion. Additionally, Bitcoin is the only top crypto asset that solely focuses on monetary or store of value use cases, while others are better described as the fuel for decentralized application platforms.

Despite Bitcoin’s recent gains, there are few signs of the market overheating, and the recovery is still in early stages. This shift in Bitcoin's role from a speculative asset to a store of value is a significant development in the cryptocurrency market. As more investors turn to Bitcoin as a safe haven, its value is likely to continue to rise. This trend is particularly important in the context of global economic uncertainty, where traditional assets may not provide the same level of stability. The decoupling from traditional risk assets is still very early and fragile, but for those watching crypto markets closely, the shift is palpable.