As Michael Saylor posted today, “there are no tariffs on bitcoin.” Nevertheless, the bitcoin price is seeing red today alongside the massive sell-off in the stock market. While bitcoin’s fractional declines in the past 24 hours pale in comparison to stocks today, the leading cryptocurrency is down a steeper 12.7% since hitting $94,000 in early March despite its design as a non-correlated asset and portfolio diversifier. According to data cited by The Wall Street Journal, bitcoin’s Q1 performance was the worst showing in seven years, owing to a perfect storm of tariffs, inflation and an economic slowdown.

After falling to $81,500, the bitcoin price has managed to climb back above the psychologically sensitive $82,000 level. Investors are in a fearful mood, and bitcoin does not fit into their risk-off strategy at the moment. However, the long-term fundamentals for the cryptocurrency market appear to remain intact, suggesting that once the dust settles, the bitcoin price could recover.

MicroStrategy, which was previously led by Saylor, has been feverishly buying up BTC in the current market cycle, including $1.9 billion worth of the leading crypto in its latest buying spree for a portfolio of 528,185 bitcoins. Much of its buying has unfolded in recent months, considering as of Q3 2024 MicroStrategy held 252,200 bitcoins on its balance sheet. 

What Gives? 

If bitcoin is supposed to be a non-correlated asset, then why has it been taking its cues from the economy? The answer could be a fear-filled crypto investment community, as evidenced by a fear and greed index that has reached “extreme fear” levels. According to Bitcoin Magazine, the Fear & Greed Index is currently hovering at a reading of 25, which is another way of saying investors are doing all they can to just hold on.

Ironically, the bitcoin price hit its stride after President Trump was elected in November. Ever since tariffs have emerged, the broader cryptocurrency market has taken it on the chin. Smaller coins are taking the brunt of the selling, including meme-coin Dogecoin, which is seeing a 3% decline in the past 24 hours.

Now What?

Bitcoin investors are focused on holding throughout the uncertainty, a strategy known as displaying diamond hands. Meanwhile, they have history on their side, as the bitcoin price has proven throughout market cycles that it ebbs and flows into tops and bottoms while ultimately following a power curve, as pointed out by X account apsk32, who advises followers that when it comes to bitcoin, “all you need is time.” 

 

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