As global markets react to escalating US-China trade tensions, Bitcoin has been trading lower for April, surrendering most of its gains from Q1. This move is tied to the US trade war, reflecting broader asset repricing with Treasury yields falling, oil collapsing, and equities entering correction territory. The acute market response since President Trump’s announcement of trade penalties and China’s retaliatory actions has had a significant impact on various asset classes. Bitcoin’s relative positioning, down less than equities and oil but more than bonds and gold, shows that it remains partially tethered to broader macro volatility.
Despite initial correlations with supportive policies after Trump’s election, recent data shows Bitcoin trading in line with risk assets rather than decoupling from them. The recent selloff across equities and the reversal in Treasury yields signify expectations of slower growth, tighter consumption, and more defensive positioning in the market. With institutional allocators reducing exposure to beta-sensitive assets, including cryptocurrency, as recession odds rise, Bitcoin’s safe-haven status has come into question.
While US and Chinese sovereign bond markets reflect different stress signals, with China showing deflationary pressure and weak growth potential, Bitcoin’s role as a global reserve hedge becomes more complicated. As institutional portfolios may hold back on discretionary allocation until stability returns, Bitcoin’s outlook in the context of recession risk remains uncertain. The structural narrative surrounding Bitcoin as a geopolitical hedge or programmable reserve asset remains intact, but correlations across all risk markets tend to increase during periods of macro stress.
As Brent crude oil has fallen over 20% since late March and global liquidity deteriorates, Bitcoin remains sensitive to these shifts. Despite being one of the worst-performing assets year-to-date, second only to oil, Bitcoin has shown relative strength compared to equities, oil, and sovereign debt markets. However, gold has outperformed all other assets in 2025, indicating its superior safe-haven status. While Bitcoin’s performance may continue to be influenced by macro conditions and recession modeling, its positioning in the market remains uncertain.
