Tariff Shock Tests Bitcoin’s Stability: Can It Maintain $80,000?

Bitcoin's position near the $80,000 mark remains uncertain, as recent market turbulence has put pressure on its price.

Following a new tariff announcement from President Donald Trump, global markets took a hit, and Bitcoin wasn’t spared, dropping over 5%. This sudden dip has reignited the debate about whether Bitcoin truly acts as a hedge against economic instability.

The idea that Bitcoin serves as a reliable store of value is being tested, with recent movements suggesting its relationship with traditional assets might be more complex than initially thought. Joel Kruger, chief market strategist at LMAX Group, believes this period could represent a crucial moment for Bitcoin. He notes that in the face of uncertainty, some investors are increasingly viewing Bitcoin as a diversification tool rather than a pure hedge.

Interestingly, despite the market turmoil, Bitcoin has managed to hold above $75,000, which some analysts see as a positive sign. The pattern of maintaining higher lows has sparked a sense of cautious optimism, as it could indicate that Bitcoin is slowly building resilience. Meanwhile, traditional markets like the Nasdaq and S&P 500 have reached their lowest levels of the year, highlighting Bitcoin’s contrasting performance.

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However, not everyone is convinced that Bitcoin is gaining stability. Javier Rodriguez Alarcon, chief trading officer at XBTO and a former Goldman Sachs executive, argues that despite Bitcoin’s reputation as a buffer against dollar volatility, its recent performance shows a persistent correlation with broader risk markets. In his view, digital assets are still heavily influenced by macroeconomic shifts, making their role as a hedge questionable.

The differing perspectives reflect the ongoing uncertainty surrounding Bitcoin’s behavior during economic shocks, leaving investors questioning whether it can truly deliver on its promise as a safe-haven asset.

Alexander Stefanov