By Key Points
- Bitcoin Decouples as $3.5T Stock Crash Boosts Crypto Demand
- Jerome Powell warns of “higher inflation” from tariffs
- Trump pushes Fed for rate cuts as recession fears rise
- BTC shows signs of decoupling from traditional markets
On April 4, Wall Street suffered a brutal $3.5 trillion loss as Bitcoin surged—signaling what many are calling a rare decoupling from traditional markets.
Federal Reserve Chair Jerome Powell delivered a stark warning during a public address: The U.S. economy could face higher inflation and slower growth due to the Trump administration’s new wave of “reciprocal tariffs.” This came just hours after former President Donald Trump fired shots at Powell on Truth Social, urging the Fed to “CUT INTEREST RATES,” accusing him of always being “late.”
Source: Truth Social – Techtoken
The economic data paints a mixed picture. While Non-Farm Payrolls beat expectations with 228,000 new jobs in March, the unemployment rate ticked up to 4.2%. Inflation remains sticky, with the Consumer Price Index (CPI) up 2.8% year over year. Powell was clear but cautious: “It is too soon to say what will be the appropriate path for monetary policy.”
Interestingly, as fear and volatility rip through Wall Street, Bitcoin is showing resilience. And this isn’t just a fluke—it’s a signal.
Bitcoin Holds Strong While Stocks Tumble
While the Dow plunged over 2,200 points and the S&P 500 recorded a 10% two-day decline, Bitcoin defied expectations. The flagship cryptocurrency held firm above $82,000 and climbed to $84,720 by the end of April 4—a striking contrast to the collapsing equity markets.
Analyst Cory Bates shared a chart comparing Bitcoin to traditional indices and commented, “Bitcoin is decoupling right before our eyes.”
According to X-based market tracker Watcher Guru, “$3.25 trillion was wiped out from the U.S. stock market today. $5.4 billion was added to the crypto market.”
JUST IN: $3.25 trillion wiped out from the US stock market today.
$5.4 billion was added to the crypto market. pic.twitter.com/ZYn8LKcoCv
— Watcher.Guru (@WatcherGuru) April 4, 2025
This surge aligns with growing sentiment that Bitcoin may finally be emerging as a true inflation hedge, especially with the market gripped by fears of a global slowdown. For those tracking macro trends, the recent Bitcoin ETF outflows—which hit $222 million in a single day—suggest many investors are rotating out of traditional finance and into native crypto assets amid tariff-related uncertainty.
Adding more fuel to the crypto fire, China has responded with 34% tariffs on U.S. goods. This escalation in the U.S.-China trade battle only deepens the uncertainty, and historically, such tensions have led to Bitcoin volatility and, in some cases, price spikes.
During the 2018 trade war, Bitcoin didn’t skyrocket, but it did show significant movement as markets reacted to geopolitical stress. Fast forward to 2025, and the market is much more mature. A growing number of analysts believe Q2 2025 could be the best time to buy altcoins—especially if Bitcoin continues its path of market independence.
Altcoins are still in accumulation, and when BTC stumbles, get ready for a new Altcoin Season!
Since December 2024, we’ve been in a bear market (actually, the sentiment was already bearish since October). But I still believe that between April and May, the market will heat up… https://t.co/XE26m6MZOl pic.twitter.com/obbbdfKHee
— Joao Wedson (@joao_wedson) April 2, 2025
Trump, Tariffs, and Crypto Chaos
The Trump factor continues to rattle both political and financial landscapes. His renewed push for aggressive tariffs has already sparked market panic—and his continued pressure on the Fed is creating even more unpredictability in monetary policy.
Interestingly, Trump has also been making moves within the crypto sector. His recent surprise decision to pardon the BitMEX founders caught the industry off guard, raising questions about his stance toward crypto regulation in the lead-up to the 2024 elections.
These unpredictable actions—combined with real macroeconomic consequences—are leaving both traditional and digital markets on edge.
Still, the volatility isn’t all bad news for crypto investors. Many are seeing opportunity in this chaos. Market participants are watching Bitcoin and Ethereum options markets closely, as they show rising interest in long volatility strategies. Traders seem ready to bet on sharp moves—up or down—in the coming weeks.
Adding to the market’s complexity, recent headlines like the Justin Sun insolvency claim are reminding crypto investors that even within the ecosystem, risks remain.
Yet despite all this noise, Bitcoin is holding its ground—and possibly carving out a role as a safe haven in times of economic confusion.
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