Crypto Markets Show 59% Less Fear Than Stocks During Tariff Announcement

Crypto markets have demonstrated a notable resilience during global shocks, showing greater emotional stability compared to traditional equities. This pattern is evident across various digital assets, indicating a structural optimism that is not merely a temporary phenomenon. For instance, during the "Liberation Day" sell-off on April 2, while some on Wall Street found this resilience impressive, it was part of a broader trend in the crypto market.

Examining the Fear and Greed Index dynamics in both crypto and stocks reveals this contrast. After Donald Trump announced tariffs on nearly all countries in April, the Stock Fear and Greed Index dropped from 19 to 3, a more than 80% plunge and a three-year low. In contrast, the Crypto Fear and Greed Index declined from 44 to 18, a 59% decrease. Although these indexes use different metrics, they both aim to measure market emotion, highlighting the differing responses to macro shocks.

During the May 2022 interest rate hike by the US Federal Reserve, which sparked recession fears, the Stock Fear and Greed Index fell 82% to 4, while the Crypto Fear and Greed Index dropped 62% to 8. Even with the collapse of LUNA and UST, which contributed to several industry bankruptcies, crypto sentiment remained less terrified than the stock market, although it took longer to rebound due to the established bear market at the time.

Crypto’s inherent optimism is a strength, not a flaw. The volatility native to crypto has recalibrated investor expectations, making a 20% drawdown in equities seem like a bear market, while in crypto, it could be a healthy correction. The scale and frequency of price swings have conditioned crypto enthusiasts to better withstand market shocks. Additionally, the cultural divide between the stock market, built by and for institutions, and crypto, born from rebellion and raised by retail, contributes to this optimism.

However, as institutional influence grows and Bitcoin continues to correlate with equities, Wall Street fears are increasingly bleeding into the sector. During the tariff scare, sentiment recovery timelines were nearly identical across stocks and crypto, a possible sign of optimism erosion. Despite this, crypto optimism remains structurally sound, protected by two dominant groups: the believers and the speculators.

The believers view crypto as the future, with Bitcoin adopters seeing it as a store of value and hedge. Altcoin believers draw strength from rapid innovation, reinforcing the idea that crypto is an ecosystem defined by momentum, not stagnation. The speculators, primarily recent arrivals, see crypto more as a speculative bet and are more reactive to news, rushing for the exits when fear spreads. However, if this group is the minority, as in Bitcoin, where long-term holders control over 65% of BTC’s supply, macro-related fears would have only a limited, short-term effect.

The conviction of believers in a bright future is not based on blind faith but has a solid foundation. In Bitcoin’s case, this foundation rests on a firm, committed holder base, a fixed supply, and a clear, predictable monetary philosophy that stands out during periods of economic uncertainty. These principles have gained credibility over time, backed by actions such as Bitcoin long-term holders accumulating over 300,000 BTC during market panics over tariffs in March-April. Liquidity strengthened, with 1% market depth ending Q1 at $500 million, indicating continued confidence and participation from market makers and investors.

Macro metrics such as global liquidity reached new highs, and multiple Bitcoin cycle indicators, including Pi Cycle Top, are far from flashing a top signal, fueling reassurance that there still could be room for upward movement. These factors fuel crypto optimism, which is embedded in the space and not temporary. While fear drives headlines, crypto continues operating like a system preparing for something bigger, and so far, history supports that view.