Investors Noting Bitcoin’s Resilience
In a note to investors dated April 15, 2025, Matt Hougan, Chief Investment Officer (CIO) of Bitwise, analyzed Bitcoin’s recent trading behavior, which might be unexpected for both its detractors and advocates. He remarked, “Bitcoin seems poised for growth, provided macroeconomic challenges can be alleviated.”
Price Stability Amidst Turbulent Markets
On April 14, Bitcoin’s price was approximately $84,379, only marginally up from $84,317 a month prior, reflecting a tiny increase of 0.07% over the 30-day period. This stability comes despite significant geopolitical shifts, including the U.S. establishing a Strategic Bitcoin Reserve and President Trump implementing extensive global tariffs.
Contrasts with Traditional Market Trends
Bitcoin’s endurance during this period starkly contrasts with the general decline seen in conventional financial markets. Hougan noted that while the S&P 500 reached its peak on February 19, it has experienced a 12.0% decline in value, while Bitcoin has seen a marginally higher drop of 12.4% in the same timeframe.
Historic Behavior During Market Downturns
Hougan found this correlation particularly striking, as it marks a departure from Bitcoin’s pattern in previous downturns. He cited that during the 2022 correction, the S&P 500 dropped by 24.5% while Bitcoin declined by 58.3%. Similarly, in early 2020 amidst the COVID-19 crisis, stocks fell by 33.8% while Bitcoin dropped by 38.1%. Historically, Bitcoin had been more reactive, suffering greater losses than traditional equities during market troubles.
A Shift in Bitcoin’s Role
In his latest analysis, Hougan highlighted the uniqueness of the current circumstances. Instead of being battered beyond the movements of the equity market, Bitcoin is closely aligning with stock losses. He did note, however, that this behavior doesn’t automatically categorize Bitcoin as a reliable hedge asset, as traditional investments like gold have outperformed it in this downturn. Regardless, he argued that Bitcoin’s ability to maintain stability near the $80,000 level amidst global market volatility is a testament to its resilience.
A Transitional Phase for Bitcoin
Hougan posits that Bitcoin is currently undergoing a transitional phase. Traditionally, it has functioned as a high-risk asset, full of volatility and potential upside, while also intermittently acting as a hedge akin to gold. With more companies adopting Bitcoin into their financial strategies and institutional investors exploring its role within diversified portfolios, it appears Bitcoin is increasingly being regarded as “digital gold.”
Considerations for Investors
However, Hougan cautioned investors against underestimating the unpredictability of the macroeconomic landscape. He acknowledged that equity markets have yet to find a stable bottom and that further significant declines could expose Bitcoin’s vulnerabilities if widespread panic ensues. While he recognized gold’s role as a traditional safe haven during systemic crises, he noted that Bitcoin’s resilience, standing above $80,000 amidst turmoil, is notable. As he concluded, “Our baby is growing up as a macro asset. And that’s a beautiful thing to see.”
As of the latest update, Bitcoin was trading at $85,200.
