- Bitcoin fell less than expected, signaling its growing appeal during high-volatility economic events.
- Tariffs and inflation fears push investors toward Bitcoin, gold and away from dollar-heavy assets.
- U.S. policy shifts may drive Bitcoin adoption as institutional interest grows in digital assets.
Grayscale Research has reported that ongoing inflationary pressures could support the performance of scarce assets such as Bitcoin and gold. The firm also compared the current situation to the 1970s, when gold attracted high levels of inflation and political uncertainty.
Despite the frequent reference to a digital commodity when it comes to Bitcoin, investors are increasingly turning to the digital currency to diversify out of traditional assets. Grayscale noted that the U.S. government’s evolving stance toward Bitcoin is “shaping a more structured and regulated market environment.” The report suggests that this could bring new, wider investor access and adoption.
Tariffs and Market Movements
On April 2, the White House introduced new reciprocal global tariffs. This announcement caused immediate reactions across financial markets. While the S&P 500 fell by approximately 12% between April 2 and April 8, Bitcoin’s price dropped by about 10% in the same period.
Moreover, Grayscale pointed out that Bitcoin’s volatility is generally around three times greater than that of the S&P 500. Based on that historical comparison, a 36% price drop might have been expected.
“The relatively smaller decline suggests an adjustment in how the market views Bitcoin’s role during economic shifts,” Grayscale stated.
Despite the fall, Bitcoin performed better than some other asset classes on a risk-adjusted basis. On April 9, a partial recovery followed after the U.S. government announced a 90-day pause on non-China tariffs. As a result, Bitcoin and the S&P 500 both showed a smaller net decrease of around 4% since the initial announcement.
Dollar Pressure and Global Asset Diversification
Trade tensions have the potential to lower international demand for U.S. dollar reserves. Grayscale suggested that this trend could encourage the exploration of alternative stores of value, including Bitcoin, gold, and other fiat currencies.
“As the dollar’s role in global trade is questioned, we expect interest in digital assets to grow,” the research firm added.
Bitcoin’s identity as a decentralized asset may appeal to investors seeking protection from local currency risks and central bank actions. This development is supported by increasing interest from institutional investors and continued regulatory attention in the U.S. market.
Long-Term Outlook for Investors
Grayscale advised long-term investors to prepare for ongoing inflation and a weaker U.S. dollar. The U.S. trade restrictions are also said to have caused a downturn of the economy and changes in investment strategies during the past.
Despite the decline of Bitcoin’s price in the wake of the tariff announcements, the fact it has fallen in a relatively controlled manner has piqued people’s interest. Some analysts have rethought how digital assets might fit in a diversified portfolio if they are to play a role during times of economic uncertainty due to its behavior during recent market drawdown.
