Bitcoin Holds Firm: A Non-Sovereign Hedge Amid Tariff Turmoil
Subscribe for expert insights and exclusive content like this, delivered directly to your inbox.
While President Trump’s tariff announcements have reignited volatility across financial markets, bitcoin has been notably resilient, outpacing both gold and tech stocks in April. This performance has renewed debate over Bitcoin’s evolving role as a hedge amid rising macroeconomic instability and geopolitical risk.
Since April 2, when President Trump announced his Liberation Day tariffs, the Nasdaq Composite has been flat since dipping earlier in the month and the Bloomberg Dollar Index has dropped nearly 4%. Gold, the traditional safe-haven asset, spiked to a record $3,500/oz before retreating, ending April with a 5.75% gain.
Bitcoin, meanwhile, rose about 11% over the same period, underscoring the growing appeal of decentralized assets in an environment characterized by increasing skepticism toward U.S. fiscal policy and central bank independence. In the thick of the tariff turmoil, Bitcoin’s realized volatility over the past 10 trading sessions has dropped to 43.86, notably below the S&P 500’s 47.29 and the Nasdaq 100’s 51.26—an unusual positioning for a digital asset traditionally known for its outsized volatility.
This relative calm marks a meaningful departure from historical norms. Bitcoin has often moved more dramatically alongside equities, reacting sharply to both risk-on and risk-off environments. But unlike major corporations represented in equity indices, bitcoin and other digital assets are largely structurally insulated from direct tariff impacts and trade policy changes. This makes them increasingly relevant in portfolios seeking exposure uncorrelated to policy-sensitive sectors.
While Bitcoin’s 30-day correlations to S&P & Nasdaq remain elevated at ~0.62 to S&P and ~0.64 to Nasdaq, its beta has declined during recent stress periods. This suggests that investors are beginning to treat the asset less as a speculative vehicle and more as a strategic, long-duration allocation. The shift is particularly evident when looking at fund flows. U.S.-listed spot Bitcoin ETFs saw $2.9 billion of net inflows in April, a sharp reversal from about $4.4 billion in outflows across February and March.
This structural rotation reflects a broader recalibration. Currently, investors are no longer just focused on inflation or near-term growth risks. They are increasingly hedging against systemic concerns—ranging from political interference in the Federal Reserve to the long-term sustainability of U.S. fiscal policy. In that context, Bitcoin’s decentralized, censorship-resistant, and non-sovereign characteristics become particularly relevant.
“Bitcoin as a non-sovereign asset means an investor doesn’t need the full faith or tax basis of a nation to support the integrity of the asset.”
— Chris Rhine, Head of Liquid Active Strategies
This behavior isn’t unprecedented. During the 2018–2019 U.S.–China trade standoff, Bitcoin rallied from around $3,500 to $13,000, mirroring yuan devaluation fears, inverted yield curves, and broader macro dislocation. Today, with rising long-end Treasury yields and heightened global policy uncertainty, that dynamic appears to be resurfacing again.
Recent positioning among counterparties interacting with Galaxy’s OTC spot and derivative trading desk reflects a market that is tactically cautious but structurally constructive—with disciplined leverage, low hedging stress, and continued engagement from both crypto-native and traditional institutions.
Furthermore, this growing demand from institutional investors—fueled by the launch of spot ETFs in January 2024, corporate balance sheet allocations, and potential government reserves—is unfolding against a backdrop of constrained supply, with 95% of Bitcoin’s total supply already mined in previous halving cycles.
“Bitcoin’s supply and demand dynamics are solidifying its place as a mature digital store of value.”
— Ian Kolman, Director & Co-Portfolio Manager
Ultimately, Bitcoin’s April performance may be more than just a reaction to policy headlines. It may represent a growing recognition that digital assets are not just speculative tools, but foundational components of portfolios navigating a new macro regime.
At Galaxy Asset Management, we’re building products and strategies to offer investors accessible and sophisticated exposure to the digital asset ecosystem and adjacent technologies.
Get in touch to learn more about our services and offerings.
Legal Disclosure:
This document, and the information contained herein, has been provided to you by Galaxy Digital Holdings LP and its affiliates (“Galaxy Digital”) solely for informational purposes. This document may not be reproduced or redistributed in whole or in part, in any format, without the express written approval of Galaxy Digital. Neither the information, nor any opinion contained in this document, constitutes an offer to buy or sell, or a solicitation of an offer to buy or sell, any advisory services, securities, futures, options or other financial instruments or to participate in any advisory services or trading strategy. Nothing contained in this document constitutes investment, legal or tax advice or is an endorsement of any of the stablecoins mentioned herein. You should make your own investigations and evaluations of the information herein. Any decisions based on information contained in this document are the sole responsibility of the reader. Certain statements in this document reflect Galaxy Digital’s views, estimates, opinions or predictions (which may be based on proprietary models and assumptions, including, in particular, Galaxy Digital’s views on the current and future market for certain digital assets), and there is no guarantee that these views, estimates, opinions or predictions are currently accurate or that they will be ultimately realized. To the extent these assumptions or models are not correct or circumstances change, the actual performance may vary substantially from, and be less than, the estimates included herein. None of Galaxy Digital nor any of its affiliates, shareholders, partners, members, directors, officers, management, employees or representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any of the information or any other information (whether communicated in written or oral form) transmitted or made available to you. Each of the aforementioned parties expressly disclaims any and all liability relating to or resulting from the use of this information. Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Galaxy Digital and, Galaxy Digital, does not assume responsibility for the accuracy of such information. Affiliates of Galaxy Digital may have owned, hedged and sold or may own, hedge and sell investments in some of the digital assets and protocols discussed in this document. Affiliates of Galaxy Digital may also lend to some of the protocols discussed in this document, the underlying collateral of which could be the native token subject to liquidation in the event of a margin call or closeout. The economic result of closing out the protocol loan could directly conflict with other Galaxy affiliates that hold investments in, and support, such token. Except where otherwise indicated, the information in this document is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. This document provides links to other Websites that we think might be of interest to you. Please note that when you click on one of these links, you may be moving to a provider’s website that is not associated with Galaxy Digital. These linked sites and their providers are not controlled by us, and we are not responsible for the contents or the proper operation of any linked site. The inclusion of any link does not imply our endorsement or our adoption of the statements therein. We encourage you to read the terms of use and privacy statements of these linked sites as their policies may differ from ours. The foregoing does not constitute a “research report” as defined by FINRA Rule 2241 or a “debt research report” as defined by FINRA Rule 2242 and was not prepared by Galaxy Digital Partners LLC. For all inquiries, please email [email protected]. ©Copyright Galaxy Digital Holdings LP 2025. All rights reserved.