Stocks Plunge 2.38% As Cryptocurrencies Gain 2.25% Amid Trade War Uncertainty

On April 21, markets experienced significant shifts, with stocks generally declining while cryptocurrencies and gold saw substantial gains. U.S. stocks lost $1.5 trillion in market capitalization, with all major indices ending the day in the red. The S&P 500 fell 2.38% from 5,282.70 points to 5,158.20 points, and the Nasdaq 100 dropped 2.46% from 18,258 to 17,808. The Dow Jones Industrial Average (DJIA) crashed 2.48%, starting the session at 39,142 and ending at 38,170. The Russell 2000 also fell 2.14% to 1,840, down from 1,880.

Concurrently, cryptocurrencies deviated from their previous pattern of following equity markets, with the total digital assets valuation rising from $2.67 trillion to $2.73 trillion, adding approximately $60 billion on April 21. This surge was largely driven by Bitcoin (BTC), which rose 1.16% in the last 24 hours and was trading at $88,524 at the time of reporting. While multiple altcoins recorded a rally within the 24-hour time frame, a significant portion of the overall rise can be attributed to the strong performance of major meme coins such as Dogecoin (DOGE).

The market dynamic can primarily be linked to the prevailing macroeconomic uncertainty arising from the escalating trade war. Although there was much optimism surrounding the reciprocal tariff pause, the situation has only deteriorated since. The Trump administration has yet to unveil the results of its claimed negotiations with various countries, and Japan has already signaled that there are concessions it would not make. China has continuously been increasing pressure with a series of proclamations and measures. As major U.S. companies are overwhelmingly reliant on global supply chains and international markets, the causes for the stock market decline are rather self-evident. Similarly, the Trump administration’s tempestuous approach to policy has ensured a drop in confidence in the American dollar and, thus, a sharp decline in the USD Index.

On the other hand, cryptocurrencies are not under pressure from the same factors and gold, as a traditional safe haven, has been growing increasingly attractive. The world’s largest commodity by market cap has been making history as it, within 48 hours, crossed above $3,400, setting a new all-time high (ATH) only to also soar above $3,500 soon after. This resilience in gold and cryptocurrencies can be attributed to their status as safe-haven assets, which tend to perform well during times of market uncertainty and economic turmoil.