Bitcoins
Bitcoin’s correlation with traditional stocks may be declining, but the fiat money supply remains BTC’s main price catalyst.
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The evolving relationship between Bitcoin and traditional financial markets is under renewed pressure as global investors flee risk assets amid intensifying US trade tensions.
US-listed spot Bitcoin (BTC) exchange-traded funds (ETFs) recorded their fourth consecutive day of outflows on April 8, with more than $326 million in net redemptions across products, according to data from Farside Investors.
BlackRock’s iShares Bitcoin Trust ETF (IBIT) saw the largest sell-off of over $252 million, its biggest daily outflow since Feb. 26.
Bitcoin ETF flows, US dollars, millions. Source: Farside Investors
The selling pressure follows US President Donald Trump’s April 2 announcement of sweeping reciprocal import tariffs, which triggered a historic $5 trillion wipeout in the S&P 500 over two days.
Related: Bitcoin may rival gold as inflation hedge over next decade — Adam Back
The delayed crypto market turbulence after the tariff-related sell-off in traditional markets highlights Bitcoin’s “evolving relationship with traditional markets,” according to Lennix Lai, global chief commercial officer at OKX exchange.
Lai told Cointelegraph:
“While falling 26% since January’s inauguration, Bitcoin’s relative resilience in the first two days following the tariff announcement — dropping 6% compared to Nasdaq’s 11% decline — suggests a nuanced dynamic emerging between crypto and conventional assets.”
Bitcoin initially remained firmly above the $82,000 support level but plummeted below $75,000 on Sunday, April 6.
BTC/USD, 1-year chart. Source: Cointelegraph Markets Pro
Some industry leaders attributed Sunday’s sell-off to Bitcoin’s 24/7 liquidity mechanics, which made BTC the only large liquid asset available for de-risking over the weekend.
Related: Bitcoin price can hit $250K in 2025 if Fed shifts to QE: Arthur Hayes
Bitcoins Bitcoin remains tied to global liquidity conditions
While there is an “encouraging sign” of a weakening correlation between Bitcoin and equities, Bitcoin’s price trajectory remains tied to global liquidity conditions, Lai said, adding:
“Though I see early signs of divergence, I believe Bitcoin remains fundamentally tied to global liquidity conditions, warranting caution amid potential market stresses — whilst gold remains as a hedge against geopolitical instability.”
“What’s most significant here isn’t just price action but Bitcoin’s growing conceptual influence — people increasingly view it as a valid strategic reserve asset for diversification in chaotic traditional markets,” Lai added.
Other analysts also see the growing money supply as Bitcoin’s main catalyst.
“Bitcoin trades solely based on the market expectation for the future supply of fiat,” according to Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom.
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Cointelegraph by Zoltan Vardai Read More