Trade war erases $1t in crypto, Bitcoin acts like risk asset

The escalation of the trade war has struck both bitcoin and actions, while traders re -evaluate risk assets and turn into gold.

Crypto’s market capitalization lost $ 1 billion of the fears of an American trade war, while traders sold Bitcoin (BTC) and turned into gold (gold). According to the last Binance reportThe climbing of American prices increases fears both in crypto and on the stock market.

In particular, the Donald Trump administration announced a coverage rate of 10%, from April 5, on all countries. Several jurisdictions will see even higher rates, including a rate of 34% on China, a tariff of 20% on the EU and a price of 24% on Japan.

Certain industries will also be faced with specific samples, in particular the automotive sector, which is subject to an additional 25%obligation. As a result, the American average rates increased to 18.8%, the highest level since the 1930 Smoot-Hawley tariffs.

Since February 2025, the market capitalization of cryptography has dropped by 25.9%, or 1 dollars. More specifically, Bitcoin is down 19.1% and Ethereum 40%. The memes and the tokens have managed worse, lowering more than 50% overall.

Bitcoin has acted more as a risk asset, less as a coverage

Bitcoin’s negative performance increased its correlation with the S&P 500. This figure has increased from –0.32 to 0.47, which suggests that during market slowdowns, Bitcoin behaves more like a risk asset than a hedge.

On the other hand, gold has reaffirmed its role of refuge against market risk and inflation. The asset has increased by 10.3% since February, while its correlation with Bitcoin fell to –0.22. This divergence occurred despite the expectations of inflation reaching an annual rate of 3 to 5%.

The growing negative correlation undermines the reputation of Bitcoin as “digital gold” and a Inflation coverage. Consequently, institutions can be less inclined to add bitcoin to their wallets as a defensive actor.