The price movements of crypto assets and major tech stocks – both previously known for behaving relatively similarly – are no longer aligned. Not so with Bitcoin: the largest crypto asset has risen in recent weeks, while key stock indices have lost value.
The recent losses in the major stock indices – the S&P 500, which tracks the 500 largest US companies, and the Nasdaq Composite, focused on tech firms – are due to political developments. These include a potential trade war triggered by US President Trump, a public dispute between Trump and Fed Chair Jerome Powell, and a broad sell-off of US Treasury bonds by investors. The consequences? The US dollar is at its lowest value in three years, and many investors are seeking safe-haven assets. One obvious beneficiary is gold, which is approaching a new all-time high of 3,500 USD per ounce. But Bitcoin is also climbing – and is leaving Wall Street behind as “digital gold.”
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Weaknesses of a centralized monetary system become apparent
One reason for this performance is certainly the emerging weakness of the system that originally inspired the creation of Bitcoin: centrally issued fiat currencies. The current tensions between the US president and the Federal Reserve chairman are dragging down the value of the US dollar – issued centrally by the Fed – in stark contrast to Bitcoin, which is not subject to any government or authority. Its issuance follows no inflationary dynamics; instead, it was designed with inherent scarcity. All of this makes it an attractive store of value in politically and economically unstable times. Another factor is Bitcoin’s divergent development from the stock market. To understand this, it helps to look back at past confrontations between Trump and the Federal Reserve.
Bitcoin’s role relative to stocks is changing
In 2018 and 2019, Trump repeatedly criticized Fed Chair Powell for not cutting interest rates quickly enough. While these confrontations briefly unsettled the markets, Bitcoin largely mirrored the movements of stocks. In August 2019, for example, Trump’s tariff threats and Powell’s critique caused slumps in both stocks and Bitcoin, while gold – as the only safe haven – rallied.
In 2025, however, the situation looks very different: Bitcoin not only has a significantly larger market capitalization, but is also much more widely accepted by institutional investors. The availability of exchange-traded Bitcoin products – both in the US and Europe – has made it much easier for traditional investors to access Bitcoin. As a result, the cryptocurrency is now far more accessible and credible as a safe haven than it was just a few years ago. Bitcoin is even benefiting from politically unstable situations, which have become even more extreme in Trump’s second term: his trade policies and rhetoric about removing the Fed chair are undermining confidence in the traditional US financial system. Bitcoin’s reaction clearly shows how far it has come.
How Bitcoin and gold behave
While market uncertainty is pushing gold to new highs, Bitcoin is increasingly seen as its digital counterpart. However, this growing correlation between Bitcoin and gold is still in its early stages. Whether it continues in the coming weeks is an important trend to watch. If trade tensions and monetary policy concerns persist, Bitcoin could continue to mirror gold’s movements. But if this pressure eases or the market environment shifts, Bitcoin’s behavior and its correlation with gold could change again.
For now, investors are clearly confident: on April 22, 2025 alone, US investors poured around one billion US dollars into US Bitcoin ETFs – and the strongest price rally of Bitcoin occurred during US market hours.
