As Wall Street Burns, Bitcoin Soars — Is Crypto the New Safe Haven?

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U.S. equities extended their downturn while Bitcoin soared as political tension intensified between President Donald Trump and Federal Reserve Chair Jerome Powell.

Trump blamed high interest rates for economic stagnation, urging swift “preemptive” cuts to revive growth. Traditional markets sank, while cryptocurrency markets bucked the trend with strong gains.

Also read: Why Eric Trump Thinks Crypto Will Save the Trump Business Empire

On April 21, major U.S. indices closed sharply lower: the S&P 500 dropped 2.4%, the Nasdaq fell 2.5%, and the Dow Jones Industrial Average lost nearly 1,000 points. Year-to-date, the S&P 500 is down over 12%, and the Nasdaq has plummeted nearly 18%, marking a continued rout in tech stocks.

S&P 500 Heat Map (Source: TradingView)

Trump reignited calls for lower interest rates on his social platform, claiming that inflation is nearly nonexistent, citing declining food and energy prices. He accused Powell—whom he labeled a “major loser”—of contributing to the country’s economic malaise.

Trump post (Source: Truth Social)

The back-and-forth escalated after Powell recently warned that Trump’s trade tariffs could trigger stagflation, a toxic mix of inflation and slowing growth. Despite the pressure, the Federal Reserve has held interest rates steady at 4.5%, and CME FedWatch indicates just a 13% chance of a rate cut at the upcoming May 7 meeting.

Also read: De-Dollarization Isn’t Just Talk Anymore — The Numbers Are Showing It

Meanwhile, the U.S. dollar continues to weaken. The U.S. Dollar Index (DXY) has fallen more than 10% since the start of the year, dipping below 98—a three-year low. Real Vision CEO Raoul Pal noted that the declining dollar is fueling global liquidity as it helps countries service dollar-denominated debt.

Everyone needs and wants a weaker dollar to service their dollar debts. No one wants it to move too fast ( it blows up VAR) but they need it lower over next 12 months. This is the purest form of global liquidity and is the largest driver of global M2 currently. The US knows this…
— Raoul Pal (@RaoulGMI) April 22, 2025

Bitcoin Outperforms Amid Traditional Market Weakness

In sharp contrast to traditional assets, cryptocurrencies are showing resilience. Total crypto market capitalization held steady at $2.83 trillion, with Bitcoin reaching a four-week high of $88,500 on April 22.

“Amid one of the most turbulent periods for global markets in years, Bitcoin is showing impressive resilience,” Bitfinex analysts said in a recent market update.

Also read: Trump Promises ‘Make America Wealthy Again’ — Will Tariffs & Tax Cuts Backfire?

Institutional interest remains strong, with major hedge funds continuing to allocate to Bitcoin as a hedge against fiat devaluation. Inflows into Bitcoin ETFs have further supported the surge.

With the Federal Reserve’s next meeting looming, a surprise rate cut could accelerate dollar weakness and drive further gains in the crypto sector. As political and monetary uncertainty deepen, investors appear to be turning to digital assets as a potential safe haven in a rapidly shifting macroeconomic landscape.

Author

Steven Walgenbach

Steven's passion for cryptocurrency and blockchain technology began in 2014, inspiring him to immerse himself in the field. He notably secured a top 5 world ranking in robotics. While he initially pursued a computer science degree at the University of Texas at Arlington, he chose to pause his studies after two semesters to take a more hands-on approach in advancing cryptocurrency technology. During this period, he actively worked on multiple patents related to cryptocurrency and blockchain. Additionally, Steven has explored various areas of the financial sector, including banking and financial markets, developing prototypes such as fully autonomous trading bots and intuitive interfaces that streamline blockchain integration, among other innovations.

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