Bitcoin has not experienced the same downturn as equities during the recent weeks of tariff uncertainty, which offers some reassurance to cryptocurrency investors. However, the fact that it hasn’t surged like gold has left some puzzled. The leading cryptocurrency has seen an increase of approximately 1% this month. Following President Donald Trump’s initial tariff announcement on April 2, the market has been marked by significant volatility. Over this time, the S&P 500 has decreased by nearly 4%, whereas spot gold has risen by 6%. Mike Novogratz, CEO of Galaxy, highlighted on CNBC’s “Squawk Box” Wednesday, “Bitcoin tends to perform well under these macro conditions, unless there’s a general risk-off sentiment.” “There are essentially two factors affecting bitcoin: one is the macroeconomic narrative, as reflected in gold’s performance … and the other is the story of adoption.” He further explained, “Given bitcoin’s status as a relatively new asset, the adoption narrative requires a more stable environment. During chaotic times like these, new buyers tend to vanish, and we have observed a significant decrease in newcomers. … Bitcoin has been the ‘Mag 8’, but that is not a permanent state.” Bitcoin is often regarded as “digital gold” and a safeguard against risks within the traditional financial sector. Many believe it can fulfill that role while still being part of their technology investments. According to Bernstein, bitcoin is currently trading more like a typical tech stock rather than serving as a hedge. Its resilience through this month’s fluctuations may be attributed to rising institutional interest in the asset, particularly through bitcoin exchange-traded funds and corporate bitcoin treasuries like that of MicroStrategy, each of which currently holds about 5% of bitcoin’s total supply. Nevertheless, Novogratz emphasized that it’s still in the early stages. “We don’t yet have the same established institutional buyers of bitcoin as we do with gold,” he remarked. “The adoption cycle for institutions is just beginning to gain momentum. And let me inform you, institutions tend to pull back in times of uncertainty rather than being proactive.” —Reporting by CNBC’s Michael Bloom.
