A research report from NYDIG highlights a shift in Bitcoin’s (BTC) market behavior, positioning it as a potential non-sovereign store of value in a landscape of growing economic and geopolitical instability. But these signs are very early and a bit pre-mature to draw an definitive conclusions about Bitcoin’s future trajectory.
Nevertheless, this past week, Bitcoin, the flagship cryptocurrency, surged 10.3%, particularly on Monday, as the so-called “U.S. hegemony unwind trade” intensified.
Meanwhile, the S&P 500, U.S. dollar, and 10-year Treasuries all declined, while Bitcoin decoupled from traditional risk assets, hinting at its role as a haven asset akin to gold or the Swiss Franc. But it is still quite early to make these assertions as previous market cycles and BTC price movements have not yet convincingly confirmed these latest trends.
The backdrop for this shift is a confluence of geopolitical tensions and economic uncertainty stemming from the current Trump administration’s policies.
Speculation about Federal Reserve Chair Powell’s potential dismissal, coupled with an on-again, off-again approach to tariffs, trade, immigration, fiscal spending, and deregulation, has rattled markets.
These developments have led investors to question long-held assumptions about the U.S. dollar and Treasuries as “risk-free” investments.
NYDIG notes that since “Liberation Day” on April 2, 2025, the U.S. dollar and long-term Treasuries have underperformed, while gold, the Swiss Franc, and Bitcoin have gained traction.
This market instability has driven structurally higher volatility across equities (VIX index), foreign exchange (CVIX index), and bonds (MOVE index).
NYDIG anticipates that volatility will remain elevated over the next four years, complicating long-term planning for businesses and investors.
In this environment, traditional haven assets like the U.S. dollar and Treasuries are losing appeal, particularly as faith in U.S. institutions wanes.
Instead, investors are turning to alternatives such as non-U.S. stocks, defensive U.S. sectors (e.g., Consumer Staples, Utilities), international bonds, TIPS, and commodities like gold.
Bitcoin’s performance stands out in this particular context.
Historically correlated with U.S. equities, the digital currency’s 90-day rolling correlation is rising, yet its recent behavior suggests a decoupling.
On Monday, as U.S. markets faltered, Bitcoin surged, acting less like a leveraged equity proxy and more like a non-sovereign store of value.
NYDIG emphasizes that this shift is still nascent and fragile, with data yet to fully confirm the trend.
However, the crypto market’s 24/7 observers sense a turning point.
The report also addresses Bitcoin’s market cap surpassing Google’s, a comparison NYDIG finds flawed.
Unlike corporate equities, Bitcoin lacks cash flows and operates more like a currency or commodity, such as gold.
With a market cap dwarfed by few liquid, globally accessible alternatives, Bitcoin appears to be positioned for investors seeking to exit traditional financial systems.
Other cryptocurrencies, often tied to so-called decentralized platforms, are less suited as stores of value, akin to industrial metals like copper rather than gold.
Despite Bitcoin’s rally, NYDIG sees no signs of market overheating.
CME futures basis and offshore swap funding rates suggest cautious optimism, while options markets indicate a recovery in its early stages.
Gold, meanwhile, saw modest gains, with some profit-taking, while oil struggled amid demand and supply pressures.
As investors grapple with a world where the U.S. may no longer be the “best house on a bad block,” Bitcoin’s original promise as an effective hedge against geopolitical and economic uncertainty is gaining recognition.
While still early, this shift underscores a broader reevaluation of safety and value in global markets.