Bitcoin Outperforms S&P 500 Amid $5 Trillion Sell-Off, Falls 3.7%
1min read Bitcoin has garnered renewed attention as a potential hedge against financial instability, demonstrating resilience during a significant stock market downturn. The S&P 500 experienced a record-breaking loss of $5 trillion in market capitalization over two days, surpassing the previous record of $3.3 trillion decline in March 2020 during the initial wave of the COVID-19 pandemic. This dramatic sell-off was triggered by the announcement of reciprocal import tariffs by US President Donald Trump, aimed at reducing the country’s estimated trade deficit of $1.2 trillion in goods and boosting domestic manufacturing.
Bitcoin’s performance during this period was notably different from traditional markets. While the S&P 500 plummeted, Bitcoin’s dip was significantly smaller, falling just 3.7% over the same two-day period. This divergence suggests that Bitcoin is increasingly being viewed as a mature global asset, according to Marcin Kazmierczak, co-founder and chief operating officer of RedStone blockchain oracle firm. Kazmierczak noted that historically, Bitcoin has been strongly correlated with risk assets during macro shocks, but this recent divergence might signal a shift in investor perception. He highlighted that Bitcoin’s fixed supply architecture contrasts with fiat currencies, which may face inflationary pressure under tariff-driven economic changes.
Despite the $5 trillion sell-off in traditional markets, Bitcoin managed to stay above its $82,000 key support level, indicating that structural demand remains intact even amid forced selling and elevated volatility. This resilience has led some analysts to suggest that Bitcoin may emerge as “digital gold” amid ongoing uncertainty. James Wo, the founder and CEO of venture capital firm dfg, noted that while Bitcoin’s initial plunge signals that some investors still see it as a risk asset, its hard-capped supply and decentralized nature could strengthen its narrative as a reliable store of value. Wo also pointed out that Bitcoin ETFs enabling greater institutional exposure have made it more influenced by macroeconomic trends.
Analysts remain confident in Bitcoin’s upside potential for the rest of 2025. The growing money supply could push Bitcoin’s price above $132,000 before the end of 2025, according to estimates from Jamie Coutts, chief crypto analyst at Real Vision. This projection is based on the M2 money supply growth, which suggests that as the money supply increases, so too could the demand for Bitcoin as a store of value.
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