Bitcoin ‘decouples,’ stocks lose $3.5T amid Trump tariff war and Fed warning of ‘higher inflation’

Key Points

  • Bitcoin gains value as US stock markets lose $3.5 trillion amid Trump's tariff war and Fed's inflation warning.
  • Federal Reserve Chair Jerome Powell warns of potential "higher inflation and slower growth" due to tariffs.
  • Unemployment rate rises to 4.2% in March, but Non-Farm Payrolls exceed expectations, adding 228,000 jobs.
  • Bitcoin shows signs of decoupling from stock market trends, rallying to $84,720 as equities collapse.
  • Market volatility expected to increase, potentially pushing Bitcoin's price upward as a hedge against economic uncertainty.

Summary

On April 4, as US stock markets experienced a significant drop of $3.5 trillion, Bitcoin saw gains, reflecting a potential decoupling from traditional market trends. Federal Reserve Chair Jerome Powell highlighted the economic risks posed by the Trump administration's "reciprocal tariffs," suggesting they could lead to higher inflation and slower growth. Despite a slight increase in the unemployment rate to 4.2%, the labor market showed strength with March's Non-Farm Payrolls exceeding expectations by adding 228,000 jobs. Powell's cautious remarks on monetary policy and inflation came amidst President Trump's call for interest rate cuts, adding to market volatility. Bitcoin's price action, rallying to $84,720 while equities fell, indicates a shift in investor behavior, possibly viewing Bitcoin as a hedge against economic uncertainty. This scenario echoes the market dynamics during the 2018 U.S.-China trade war, where Bitcoin experienced volatility and price increases amidst escalating trade tensions.

cointelegraph
April 5, 2025
Crypto
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