The escalating trade war has hit both Bitcoin and stocks, as traders reassess risk assets and turn to gold. The crypto market cap has lost $1 trillion over the fears of a US trade war, as traders sold Bitcoin (BTC) and turned to gold ( gold ). According to the latest Binance report , escalating US tariffs are spiking fears in both crypto and the stock market. Notably, the Donald Trump administration has announced a 10% blanket tariff, effective April 5, on all countries. Several jurisdictions will see even higher rates, including a 34% tariff on China, a 20% tariff on the EU, and a 24% tariff on Japan. You might also like: Crypto’s global nature shields it from tariff shocks, says Offchain Labs exec Certain industries will also face specific levies, particularly the auto sector, which is subject to an additional 25% duty. As a result, average US tariffs have risen to 18.8%, the highest level since the Smoot-Hawley Tariff Act of 1930. Average US tariffs on all imports | Source: Binance Since February 2025, the crypto market cap has dropped 25.9%, or $1 trillion. Specifically, Bitcoin is down 19.1% and Ethereum 40%. Memecoins and AI tokens have fared worse, falling more than 50% overall. Bitcoin acted more like a risk asset, less as a hedge Bitcoin’s negative performance has increased its correlation with the S&P 500. This figure rose from –0.32 to 0.47, suggesting that during market downturns, Bitcoin behaves more like a risk asset than a hedge. Crypto, gold, and S&P 500 price performance since February 2025 | Source: Binance In contrast, gold has reaffirmed its role as a safe haven against market risk and inflation. The asset is up 10.3% since February, while its correlation with Bitcoin has dropped to –0.22. This divergence occurred despite inflation expectations rising to an annual rate of 3–5%. The growing negative correlation undermines Bitcoin’s reputation as “digital gold” and a hedge against inflation . As a result, institutions may be less inclined to add Bitcoin to their portfolios as a defensive asset. Read more: Bitcoin bleeds, stocks sink, and tariffs spike — is this the start of a global sell-everything moment?
