Trump's Tariffs Rocked the Market—Will Bitcoin Emerge as a New Hedge Asset?

! Amid escalating global trade tensions under the impact of harsh tariff policies, investors are reconsidering traditional financial assets. Bitcoin, once seen as a volatile digital experiment, is now emerging as a potential hedge against inflation, currency devaluation and economic instability.

With a fixed supply and independence from central bank control, can Bitcoin become the new safe haven in a world affected by tariffs?

Bitcoin's growing appeal amid tariff chaos

April has become an extremely volatile month for the global economy due to the imposition of tariffs by President Trump and the subsequent announcement by the US administration to pause the policy for 90 days.

U.S. President Donald Trump recently adopted an aggressive tariff policy, mainly targeting the 15 countries with which the U.S. has asymmetric trade relations. This has caused turmoil in the global economy and negatively affected most major asset classes, including the cryptocurrency sector.

However, the Trump administration has decided to pause the policy for 90 days for countries that have not responded.

! Will Bitcoin emerge as a new hedge asset?Bitcoin Market Performance | Source: Tradingview Since April 1, the Bitcoin market has grown by 2.46%. Many believe that Bitcoin is attracting attention as a hedge against the economic uncertainty caused by the trade war and tariffs.

Bitcoin's fixed supply and decentralization form the opposite of fiat currencies, which are influenced by central banks and political decisions.

More importantly, reports show that Bitcoin has a low correlation (dưới 40%) with traditional assets.

Impact of tariffs on US dollar

At the beginning of this month, the US Dollar Index was at 104.196. Since then, the index has fallen by more than 4.39%.

! Will Bitcoin emerge as a new hedge asset?US Dollar Index | Experts noted that tariffs could initially boost the value of the dollar but could later hurt exports and hurt U.S. businesses.

Comparison of Bitcoin to traditional financial assets

At the beginning of this month, the S&P 500 was $5,598.77 and the Nasdaq 100 was $19,179.58. Since then, the S&P 500 and Nasdaq have fallen more than 5.77% and 4.8% respectively.

! Will Bitcoin emerge as a new hedge asset?S&P 500| Source: Tradingview However, during the same period, the Bitcoin market gained slightly by 2.46%, as mentioned earlier. In just the past seven days, the market has witnessed a growth of 3.1%.

This shows that despite the volatile market, Bitcoin has shown resilience.

This reinforces the belief of many investors that although the shocks caused by tariffs can lead to a short-term decline in Bitcoin's price, its long-term appeal as a hedge measure remains strong.

In 2024, the Bitcoin market will record a growth of 121.1%. In 2023, the market has achieved a growth of 155.4%.

Although in the first quarter of this year, the market reported a decline of 11.7%, in the current quarter, so far, the market has increased by almost 2.72%.

Can Bitcoin replace gold as a safe-haven asset?

Recently, Peter Schiff advised investors to abandon Bitcoin and instead invest in American gold mining companies. Schiff, an ardent gold advocate, once warned that the price of Bitcoin could drop as low as $10,000.

Bitcoin is being considered "digital gold," but it has yet to replace gold as the main safe haven.

! Will Bitcoin emerge as a new hedge asset?Spot Gold Price Data | Source: TradingViewSince April 1, spot gold prices have risen 6.8%. The gold market has outperformed the Bitcoin market during this period.

This means that, although investor preference is shifting to Bitcoin, gold still dominates in times of crisis.

Disclaimer:*** The article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions

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Mr. Teacher

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