For years, Bitcoin’s price has closely tracked risk assets like the Nasdaq 100 and major tech stocks. However, recent developments have seen Bitcoin diverge from these trends, acting more as a haven asset. Several factors may behind this:
Finite Supply:
Bitcoin’s capped supply of 21 million coins (with about 20 million already in circulation) stands in stark contrast to the unpredictable nature of U.S. monetary policy.
Monetary Policy Uncertainty:
Political pressure on the Federal Reserve, especially from President Trump, who has called for lower interest rates and even suggested replacing the Fed Chair, has created uncertainty around the dollar.
Investor Behavior:
Amid dollar weakness, investors are selling dollars and seeking alternatives like gold and Bitcoin.
Regulatory and Policy Developments:
Optimism surrounds the appointment of Paul Atkins at the SEC and President Trump’s executive order to create a strategic Bitcoin reserve. Proposals are being discussed to fund Bitcoin purchases without using taxpayer money, such as monetizing some of the Fed’s gold holdings.
Latest Developments: Bitcoin’s Meteoric Rise and Regulatory Shifts
Bitcoin Surges Past $90,000 as Investors Flee Volatile Markets
In the past two days, Bitcoin has reclaimed the $90,000 mark for the first time since March, surging to over $91,500—a two-day gain of more than 8% and a 23% rise from its April low. This rally coincides with ongoing turbulence in U.S. equities and a weakening dollar. Notably, Bitcoin’s price increase has outpaced gold’s 8% gain in April, while both the S&P 500 and the U.S. dollar index have dropped by 5% this month.
A significant driver of this surge is the influx of institutional capital: U.S. spot Bitcoin ETFs saw $381.4 million in inflows on Monday, the largest since January, marking four days of inflows in the last five trading sessions. This signals growing confidence in Bitcoin as a store of value, especially as it diverges from risk assets and traditional markets.
Political and Regulatory Winds Shift in Bitcoin’s Favor
Political developments continue to influence Bitcoin’s trajectory. Former President Trump has intensified calls for lower interest rates and is exploring legal avenues to replace Federal Reserve Chair Jerome Powell before his term ends in 2026. Meanwhile, the White House is actively studying the logistics of building a strategic Bitcoin reserve, including proposals to monetize some of the Fed’s gold to buy Bitcoin, all without burdening taxpayers.
On the regulatory front, the Federal Reserve announced on April 24 the withdrawal of previous guidance for banks regarding crypto-asset and dollar token activities. This move is intended to align regulatory expectations with evolving risks and to foster innovation in the banking system. Banks will now be monitored through standard supervisory processes rather than special notifications, potentially smoothing the way for greater institutional engagement with crypto assets.
Optimism with Caution:
Traders are increasingly optimistic, with call options suggesting expectations that Bitcoin could surpass $95,000 by late April or May. However, analysts caution that, with macroeconomic risks temporarily subdued and trade tensions easing, Bitcoin may consolidate in the $90,000–$94,500 range before making a decisive push toward the $100,000 milestone.
From Risk Asset to Safe Haven:
Bitcoin’s recent breakout from its traditional correlation with tech stocks marks a pivotal moment for the cryptocurrency. As political uncertainty, regulatory shifts, and investor demand converge, Bitcoin is increasingly viewed as a hedge against monetary instability and a viable alternative to traditional safe havens like gold. With institutional inflows rising and regulatory hurdles easing, Bitcoin’s momentum appears set to continue—potentially propelling it toward new all-time highs in the weeks ahead.
