Sharp declines hit U.S. stocks as concerns over international trade policies and pressure on the Federal Reserve unsettled investors. Amid this volatility, the Bitcoin safe haven narrative gains traction as the digital asset shows contrasting strength.
The market turbulence saw investors move away from U.S. equities and the dollar. The DOW Jones Industrial Average plummeted 976.23 points (2.49%) by late afternoon trading. Similarly, the S&P 500 dropped 2.63%, and the tech-heavy Nasdaq Composite slid 2.97%.
Meanwhile, the U.S. dollar index fell to 97.92, its lowest point since 2022. This downturn coincides with escalating criticism of Fed Chair Jerome Powell by former President Donald Trump, raising questions about the central bank’s autonomy.
In stark contrast, Bitcoin (BTC) climbed to a daily high of $88,460. This price action suggests some traders might be viewing the leading cryptocurrency as a store of value against a backdrop of dollar weakness and stock market fear. Gold also performed well, rising 2.95% to $3,413 per ounce.
Contributing to market jitters, Trump publicly urged Powell to lower interest rates via a Truth Social post on April 21, arguing lower energy costs could mitigate inflationary risks from such a move.
[Donald Trump’s post on Truth Social, calling out Fed Chair Jerome Powell]
Fed Chair Powell, however, has previously advocated for patience, citing a robust U.S. economy and strong employment figures as reasons the Fed does not need to rush policy changes, despite stock market swings.
The historical independence of the Federal Reserve from political influence is considered crucial for currency stability. Current pressures highlight the delicate balance central banks must maintain, a factor potentially pushing some investors toward alternative assets like cryptocurrency.
This divergence between traditional markets and assets like Bitcoin fuels the ongoing debate about whether digital currencies can truly function as reliable safe havens during times of economic stress.