- Bitcoin's break with stocks hailed as pivotal.
- Finally digital gold?
- Crypto has long tracked other 'risk on' assets.
The next time US President Donald Trump sends markets cratering with tariffs, Bitcoin investors won’t blink, says Arthur Hayes.
In a blog post on Tuesday, Hayes, the co-founder of BitMEX, wrote that Bitcoin’s recent slump to $74,500 marked the asset’s bottom, and it would go “up only” just like gold.
“Bitcoin will shed its association with tech stocks and will rejoin gold in the ‘up only’ cuddle position,” Hayes wrote.
Rebound
Bitcoin’s price crossed $93,000 on Wednesday and has surged 25% from its March lows in the last few days.
The rebound is in tandem with a broader market recovery; US stock futures on Wednesday were upafter the Trump administration signalled its intention to negotiate a trade deal with China.
But Hayes said Bitcoin had reached a pivotal stage by decoupling from the equities market.
Ever since the Covid-19 pandemic, Bitcoin and the rest of crypto had largely tracked stocks, especially tech shares, as a “risk-on” asset. This made the cryptocurrency susceptible to monetary policy by the Federal Reserve, as well as macroeconomic forces such as inflation.
Now Hayes is part of a chorus of Bitcoin investors who say it is finally fulfilling its destiny as a store of value or haven asset, like gold. This should make it useful as a hedge against market panics.
“Any investor with US stock and bonds is looking for something whose value is anti-establishment,” Hayes wrote. “Physically, that’s gold [and] digitally, that’s Bitcoin.”
Hedging role
Gold was trading at $3,300 per ounce on Wednesday and has climbed 43% in the last 12 months.
The sudden shift in Bitcoin’s behaviour has long been desired by maxis.
For years, sceptics have derided its purported role as a hedge against macroeconomic risk, especially after it failed to provide a safe harbour during the double-digit surge in consumer prices in the US and Europe in 2022 and 2023.
To be sure, Bitcoin’s decoupling is still in its earliest stages and may still reverse.
Still, Bernstein analysts noted that Bitcoin’s outperformance of the Nasdaq during the tariff turmoil was “striking.” Eric Balchunas, Bloomberg Intelligence’s ETF analyst, said Bitcoin was already showing negative correlation to stocks.
As Bitcoin sheds its tech proxy skin, Hayes said the price could reach just shy of $200,000. He previously predicted Bitcoin could jump to $250,000 this year.
Other market observers also expect a major resurgence for Bitcoin.
Zach Pandl, Grayscale’s research head, told DL News this week that Bitcoin’s price performance in April has validated its position as a “portfolio diversifier” and that it was bound to exceed its peak price of $108,000 this year.
Crypto market movers
- Bitcoin is up 6% over the past 24 hours to trade at $93,721.
- Ethereum rallied 10.8% over the same period to $1,813.
What we’re reading
- Grayscale says Bitcoin is cementing role as ‘portfolio diversifier’ on path to all-time highs — DL News
- 1 week → 239k new tokens on Base — Milk Road
- Mantra Founder Is Burning 150 Million Tokens. Would He Try to Get Them Returned? — Unchained
- When will the bull market continue? — Milk Road
- Hacker infects XRP Ledger software with crypto stealing ‘backdoor’ — DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.