The market’s reaction to President Trump’s imposition of tariffs has been one of the most dramatic financial events in recent memory.
Equities were leaning bullish, even after the initial 10% base tariffs were announced during the “Liberation Day” presentation, with BTC briefly surpassing the $88,000 mark. However, sentiment shifted sharply following President Trump’s announcement of the so-called Reciprocal Tariffs. These will be layered on top of existing tariffs and applied to most countries (with notable exceptions for Mexico and Canada) and, notably, are calculated based on bilateral trade deficits, not existing tariff rates.
While several countries are moving quickly to the negotiating table, China has announced a retaliatory 34% tariff on U.S. goods, set to take effect just one day after the U.S. tariffs go live.
The fallout was swift and severe. Over two days, global equity markets lost $6.6 trillion in market cap, surpassing the $4.4 trillion wiped out during the COVID crash. Hedge funds executed their largest single-day selloff of global equities since 2010, according to Goldman Sachs. The bank has also indicated it may revise its U.S. recession outlook if the tariffs go into effect on April 9, a scenario under which they would expect the Federal Reserve to cut rates by 200 basis points over the following 12 months.
Weekend interviews with Secretaries Bessent and Lutnick, as well as President Trump himself, failed to calm investors. Asian markets closed deep in the red, with some exchanges triggering circuit breakers.
Monday’s U.S. market session was marked by sharp intraday swings driven by headline-driven volatility. Early in the day, President Trump escalated tensions with a threat of an additional 50% tariff on China. Markets later found some relief after Treasury Secretary Bessent announced “meaningful negotiations” underway with more than 50 countries. By the close, the S&P 500 ended down 0.2%, while the Nasdaq managed to edge into positive territory, closing up 0.1%.
BTC slipped below $80,000 for the first time since the election. The ETH/BTC ratio touched new multi-year lows, now below the 0.020 level. Meanwhile, SOL fell below $100 for the first time in over a year before reclaiming triple digits by the close.
BTC price and turnover dynamics are revealing some notable trends.
The price reaction in BTC has been mild compared to previous broad market sell-offs. Since the NY market close on Wednesday, BTC is down 8.4%, outperforming for the S&P 500 (-10.7%) and the Nasdaq (-11.4%).
Now compare that to major market drawdowns in recent years:
- At the peak of the Japanese Yen carry trade unwind in August 2024, BTC fell 13.5%, while the S&P 500 and Nasdaq declined 3.0% and 3.4%, respectively.
- During the regional banking crisis between March 09 and 10 2023, BTC dropped 8.9%, compared to 3.3% and 3.8% for the two equity indexes, although BTC rebounded by over 20% in the following session while the equity indexes stood flat.
- Going all the way back to the thick of COVID crash between March 11 and March 20, 2020, BTC sold off 25.2%, while the S&P 500 and Nasdaq fell 20.0% and 17.6%, respectively.
There’s a popular narrative that BTC is decoupling from risk assets. That view has been clearly invalidated, but it also misses the more important point.
What matters is that BTC’s beta to broader risk assets appears meaningfully lower in this sell-off than in previous ones. This points to a growing recognition of BTC’s potential role as a non-sovereign store of value during periods of economic stress. Case in point: BTC ETF outflows were relatively muted, totaling less than $200 million across Thursday and Friday.
This isn’t to say BTC is now seen as a safe haven.
The correlation with equities remains relatively high, as the chart below shows. One day of divergence where BTC zigs while stocks zag doesn’t change that. On a 30-day rolling basis, BTC’s correlation with the S&P 500 is 0.53, and 0.41 with the Nasdaq, well within risk asset behavior.
Still, it’s a step—however subtle—in a different direction.
The second noteworthy trend is the unusually low spot BTC volumes during this episode of market volatility. Historically, periods like this see a surge in volume, driven in part by forced liquidations in perpetual futures, but also by increased investor repositioning.
For context, spot volumes during prior major market sell-offs were significantly higher, according to AmberData. At the peak of the Yen carry trade unwind, BTC spot volume reached north of $35 billion, still among the top five daily prints on record. During the regional banking crisis, turnover hit over $20 billion. Even in the early days of the COVID crash, BTC spot volume was around $10 billion, despite Bitcoin’s market cap being less than 10% of what it is today.
In contrast, spot volumes over the past few days have rarely exceeded $10 billion. On a three-day moving average basis, the chart shows that current BTC spot volume is muted relative to the post-election period, highlighting the unusual calm in trading activity despite heightened macro stress.
Low volumes suggest that outsized corporate buying from names like MSTR or GME is unlikely to be propped up BTC today.
The key signal in this rout: BTC trading dynamics were far more muted than in past shocks. It’s not a safe haven just yet but the behavior is starting to echo one.
As Jeff Dorman put it: “A safe-haven is not an asset that never goes down—it’s one expected to retain or gain value during turbulence.” This is especially true for a day in which equities were down and yields were up—bonds didn’t show much haven strength either.
The near-term market outlook remains uncertain, and we may be in for a period of sideways chop or even further deterioration. Over the coming weeks, tariff-related headlines will likely dominate, keeping risk sentiment fragile. If conditions deteriorate further, some will start calling for Fed intervention, though many seasoned observers see that as premature. Attention will then turn to how key economic indicators, especially around inflation and activity, respond to the shifting global trade environment.
Longer term, BTC’s recent trading behavior is likely to draw fresh interest from those questioning what a non-sovereign store of value looks like in a fractured world.
In a regime defined by fragmentation and policy whiplash, Bitcoin's relevance won’t need to shout, it will speak for itself.
.png)
