Financial Insights That Matter
Bitcoin BTC/USD may have become increasingly correlated with stocks amid escalating trade war concerns, but an analyst predicted that a deteriorating economic environment will eventually decouple the apex cryptocurrency from the risk-on sector.
What Happened: Michael Terpin, CEO of Transform Ventures and author of the book “Bitcoin Supercycle,” told Benzinga that the ongoing tariff wars could trigger a recession, disrupting supply chains, causing job losses, and relocating workers.
Notably, the odds that the U.S. would plunge into recession in 2025 were 50% on the cryptocurrency-based prediction platform Polymarket. It was 66% before Trump announced a 90-day pause in tariffs on Wednesday.
“But it will inevitably also bring lower interest rates and massive money printing, which should help even further decouple Bitcoin from the stock market,” Terpin prophesied.
See Also: Bitcoin, Ethereum, XRP, Dogecoin Explode Higher As Trump Hits Pause On Reciprocal Tariffs
Conversely, Chuck ZhangCFO of decentralized infrastructure provider PolyFlow, said that many people are treating Bitcoin as another risk asset rather than a “digital gold.”
Notably, Bitcoin’s correlation with the S&P 500 has risen from 0.45 at the beginning of the year to 0.67 as of this writing, according to The Block.
“That said, I’m hoping that this time around, we’ll have more precise data to see exactly how people in the market are treating BTC in terms of its ability to hedge,” Zhang added.
Why It Matters: Several commentators have supported the idea that Bitcoin will emerge stronger from the tariff chaos and act as a potent inflation hedge.
Matt HouganChief Investment Officer at Bitwise Asset Managementsaid that Trump’s aggressive push for tariffs and comments from top economic officials indicating a deliberate move toward a weaker dollar could have “big implications” for Bitcoin.
Previously, BitMEX co-founder Arthur Hayes said that economic policies like quantitative easing could devalue the dollar, leading investors to seek a hedge in Bitcoin.
Price Action: At the time of writing, Bitcoin was exchanging hands at $81,753.28, up 5.46% in the last 24 hours, according to data from Benzinga Pro. Year-to-date, the cryptocurrency was down 13.31%.
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