Americas Crypto Daybook: Tariff Tensions Between the US and China Challenge Bitcoin's Safe-Haven Status

Authors James Van Straten and Omkar Godbole provide the following analysis (all times are ET unless otherwise specified). The current global landscape is filled with uncertainty, largely due to the tariffs imposed by Trump. Markets experienced a slight rebound on Tuesday following a significant downturn in Asia and Europe on Monday, but this was more of a relief rally than a genuine recovery. The core of the conflict lies in the standoff between the US and China, with neither side willing to back down, even if it means prolonged uncertainty and market instability. As markets briefly paused from the turmoil, skeptics of cryptocurrency were quick to point out the vulnerability of bitcoin's safe-haven narrative, which was bolstered by its resilience last week but then quickly unraveled on Monday when the price plummeted to $75,000. Although this is true, expecting the bitcoin price to remain unaffected was overly optimistic, as investors historically rush to liquidate their assets, including traditional safe-haven investments like gold, during times of crisis. However, bitcoin has demonstrated a lower beta than US equities since the tariff announcement, indicating its relatively stable performance. In the grand scheme, bitcoin is holding up fairly well, with the Nasdaq down over 22% from its all-time high and bitcoin down by 28%. In previous episodes, such as the yen carry-trade unwind in August 2024 or the COVID crash in March 2020, bitcoin suffered far more significant relative losses. Since the New York market closed on Wednesday, BTC has declined 8.4%, outperforming the S&P 500's 10% drop and the Nasdaq's 11% fall. According to David Lawant, head of research at FalconX, 'What matters is that BTC's beta to broader risk assets appears meaningfully lower in this sell-off than in previous ones, suggesting a growing recognition of bitcoin's potential role as a non-sovereign store of value during periods of economic stress.' Monday's trading session also included a brief episode of 'short-term madness' driven by false reports of a 90-day tariff delay, which caused the markets to spike before promptly crashing back down after the reports were refuted. Key points to watch include token events, conferences, token talk, derivatives positioning, market movements, and bitcoin statistics.