Bitcoin has recently suffered a startling price drop. With economic uncertainty abound, crypto is taking a hit across the board. We discuss if Bitcoin may actually be able to benefit from these circumstances in the article below.  

Crypto investors have had a rocky ride over the past year. From Bitcoin halving events to ETFs, there have been record highs and falls from grace just as quickly. Yet in the latest twist of fate, a drop in Bitcoin price is not the harbinger of doom many may think at first glance. In fact, there are voices taking it as a positive sign that Bitcoin may be bucking economic trends.

Tariff Impact

Markets have been spooked by the impact of tariffs. This has had an obvious impact on riskier assets like cryptocurrency. However, many have noticed that despite a drop, Bitcoin has shown extreme resilience and is weathering the storm remarkably well. There are even some who now believe that Bitcoin is pulling away from macroeconomic trends and their impact and that tariffs could be a positive move for it.

The Bitcoin price today stands just above the $76,000 USD mark. The day below, it had dropped further, a total drop of 29% from its $103,332 high in December. However, despite a poor economic output globally, there are people predicting a rally, and that it still has strong recovery potential.

This comes from the decline in general fiat currencies amidst economic uncertainty. As a digital asset, it is often viewed as more resilient. A further drop in the USD could mean a short-term benefit arises due to Bitcoin’s correlation with the currency. This shake-up of the dominant global currency could turn world investors to look at other assets, including crypto.

 

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There is also the expectation that in this, rates may have to be cut by the FED. This is the traditional circumstance in which price rises for Bitcoin have been seen to rise.

Depending on global politics over the next week or so, Bitcoin could have already hit its bottom. This will be dependent on what happens and if a brighter day is on the horizon. However, a shift to worsening climates could see it fall back into a bear market.

Current Cryptocurrency Prices

It is not only Bitcoin that has taken a plunge. Plenty of other cryptocurrencies, including Ethereum, Solana, Dogecoin, and XRP have also taken a hit. This fall saw $1.3 trillion wiped off the cryptocurrency market cap since January. Many people are scrambling to work out if this could lead to a full market crash, or if Bitcoin can indeed benefit from this uncertainty.

One casualty has been the Bitcoin ETF products. Further pressure between cryptocurrency and more traditional financial markets has been seen, as on April 8th  four consecutive days of outflows had occurred. This equated to around $326 million.

The biggest outflows came from Blackrock products, which leaked $252 million. This was the biggest outflow since late February. All of this mirrored a wider $5 trillion that had been wiped off the S&P. However, Bitcoin’s overall drop of 6% as opposed to bigger amounts of in stocks and shares, proved its resilience.

Can XRP Rival Bitcoin?

One cryptocurrency many people are looking bullish on in this furor is XRP, with some predicting it may even be a better investment and make more gains. It is the world’s fourth-largest cryptocurrency, with a market cap of $100 billion. While it seems a long way off rivalling Bitcoin, which has a value of $1.5 trillion, it could match it in terms of gains for investors.

By no means will XRP catch up in value. Bitcoin would need to seek to make gains and XRP would need to add 15x. Bitcoin is also a barometer of the market, when it goes up all prices go up, and the opposite. It is the performance in which it may win, as in January it was up 600% reaching a high of $3.39. It has been the top-performing cryptocurrency this year.

Part of this is that it is a currency used for cross-border payments. In a climate where trade is becoming stifled and fiat currencies weakened, XRP has a clear advantage and usefulness. This alone could propel it onto bigger and better things.

So is Bitcoin pulling away from mainstream economic trends? It is still hard to say. If the tension continues in global markets, it will be easier to determine. Should Bitcoin be less impacted by what is going on elsewhere, then it is a sign it is. This would see it as a hedge against other factors, and its price may go up in the short term.

Long term, it could still go either way. If this is the case, it suggests Bitcoin is still a long way off mainstream financial adoption. This could in fact push it back further, stagnating the price. This is why it is imperative to keep watching the price for both long and short positions.