Crypto Markets Show Resilience Amid Trump's Tariff Turmoil
2min read Crypto markets have demonstrated a notable level of stability amidst the broader market turmoil triggered by US President Donald Trump’s fluctuating global tariff policies. According to an analyst from the New York Digital Investment Group (NYDIG), the crypto markets have remained relatively orderly despite the widespread panic in traditional financial markets.
Greg Cipolaro, the global head of research at NYDIG, highlighted in an April 11 note that historically, during broad risk-off moves, crypto markets tend to experience significant stresses. However, this time, such stresses have not materialized. Cipolaro pointed out that crypto perpetual futures rates have been persistently positive, with liquidations spiking on April 6 and 7 following Trump’s initial tariff announcement on April 2. The total liquidations amounted to $480 million, which was considered relatively low compared to other notable liquidation events.
Cipolaro also noted that the price of Tether (USDT), a stablecoin widely used in crypto trading, remained below $1 and did not experience a sharp decline. This stability in USDT’s price suggests that the crypto market has been able to maintain a level of order despite the broader market chaos.
Trump’s tariff regime, announced on April 2, initially imposed various levies on multiple countries before being paused for 90 days just hours after coming into effect on April 5. Instead, a base tariff of 10% was implemented, with higher tariffs specifically targeting China. The announcement led to a significant downturn in both traditional and crypto markets, with many assets failing to recover to their pre-announcement levels.
Over the weekend, the Trump administration added to the confusion by stating that the exemption of many electronics from tariffs, announced on April 11, was temporary. This further uncertainty has contributed to the overall market volatility.
Bitcoin, in particular, has shown resilience amidst the market volatility. Cipolaro noted that while Bitcoin did not escape the market turbulence, it has fared better than many other asset classes at current prices. Bitcoin’s volatility has not risen to historic levels, remaining relatively stable despite the instability caused by the Trump administration’s policies. This stability has made Bitcoin increasingly attractive to investors seeking stores of value not tied to sovereign countries and thus unaffected by trade turmoil.
Bitcoin’s narrowing volatility gap compared to other assets makes it more appealing to funds with risk parity portfolios, which use risk to determine asset allocations. Cipolaro suggested that investors are likely reducing their risk exposure but may be reallocating some of their assets to Bitcoin, contributing to its relative stability. He also noted that risk parity funds allocating to Bitcoin can help dampen its volatility, making the asset more attractive and potentially reinforcing a cycle of increased adoption and stability.
However, Ruslan Lienkha, chief of markets at YouHodler, expressed a different perspective. In an April 12 note, Lienkha warned that despite a wider market rebound, technical indicators are painting a concerning picture. He pointed out that a “death cross,” where the 50-day moving average crosses below the 200-day moving average, is potentially forming on Bitcoin and the S&P 500. This pattern is generally considered a bearish signal for the medium term, suggesting that markets may struggle to sustain upward momentum without a clear catalyst or positive macroeconomic developments.
