Bitcoin (BTC), the world’s largest digital asset by market value, recently held steady as President Donald Trump’s trade war spurred a shift away from U.S. assets.
The so-called decoupling reinforced the belief of crypto advocates that BTC is becoming a safe haven and a low-beta play relative to equities.
BlackRock’s Head of Digital Assets, Robert Mitchinik, suggests that cryptocurrency could evolve into a permanent low-beta asset. Mitchinik commented during a panel discussion at the Dubai Token2049 conference, saying, “It makes no fundamental sense, and yet when it’s repeated enough, it can actually become a little self-fulfilling, right?” He acknowledged that such perceptions could become reflexive due to the repetition by pundits and researchers.
Amid escalating U.S.-China trade tensions, investors aggressively divested from U.S. assets, including the tech-heavy Nasdaq index and the S&P 500, generating recession fears. In contrast, Bitcoin maintained its stability, and on a seven-day basis, it appeared less volatile than the S&P 500.
This short decoupling has fortified the crypto community’s perception of Bitcoin as an asset that remains largely insulated from the economic, political, and monetary risks tied to any particular country. The situation has catalyzed renewed capital inflows into U.S.-listed spot ETFs, according to Mitchinik.
In the last ten trading days, investors have funneled at least $3 billion into these spot ETFs, with BlackRock’s IBIT receiving the most significant inflows, as reported by Farside Investors.
Mitchinik also noted that part of this recent decoupling could stem from the transfer of Bitcoin from less stable hands to more fundamentally-driven long-term holders, a shift he emphasized as “definitely happening.”
Jan van Eck, CEO of VanEck, expressed his desire to see Bitcoin return to its pre-2020 status as an uncorrelated asset while also speaking at the same panel. He noted that the institutionalization of Bitcoin, post-COVID crash in 2020 and the introduction of ETFs early last year, has resulted in correlations developing between Bitcoin and traditional finance assets, particularly the Nasdaq index. This evolution has somewhat diminished Bitcoin’s appeal as a portfolio diversifier.
Van Eck concluded that traders would be more inclined to hold significant amounts of Bitcoin if the correlations with traditional financial assets were to weaken.
