The US stock market faced a significant downturn on Friday, April 4, 2025, with a staggering loss of $1.5 trillion in market value just hours after opening. This sharp decline has been attributed to rising investor concerns over global trade tensions, particularly following President Donald Trump’s announcement of new tariffs that could potentially ignite a trade war with China.
The S&P 500 index plummeted by 4.8 percent, marking its largest daily decline in over four years. In response to these market conditions, major investment banks have begun to adjust their year-end projections. UBS has lowered its target for the S&P 500 from 6,400 to 5,800, while RBC has forecasted a more conservative estimate of 5,550. Furthermore, JPMorgan has indicated a worrying 60 percent chance of a global recession if these tariffs remain in place.
Notably, technology stocks bore the brunt of this market crash. The ETF Roundhill Magnificent Seven, which includes heavyweights like Apple and Amazon, saw a nearly 7 percent drop and has now declined 20 percent year-to-date. Individual stocks also suffered, with Apple’s shares falling by 8 percent, Amazon’s by 7 percent, and Tesla’s by 5.4 percent. Analyst Dan Ives from Wedbush cautioned that these escalating trade tensions could hinder technological advancements, particularly in the field of artificial intelligence (AI), potentially stalling progress by as much as a decade.
The financial sector was not spared either, with shares of JPMorgan and Citigroup experiencing a dramatic decline of approximately 59 percent.
In stark contrast, Bitcoin and other cryptocurrencies displayed unexpected resilience amidst the stock market chaos. After dipping to around $82,000 on April 2, Bitcoin managed to recover by 0.76 percent the following day. On Friday, as the stock market continued to struggle, Bitcoin only saw a slight decline of 0.42 percent and even recorded a 1.07 percent increase in the last 24 hours, trading at $82,809.
Moreover, the global cryptocurrency market capitalization initially fell to $2.58 trillion but rebounded to $2.61 trillion, reflecting a 0.54 percent increase. Notably, all top ten cryptocurrencies recorded gains, with Dogecoin leading the charge with a 5.4 percent increase, followed closely by XRP at 5.22 percent, Cardano at 3.29 percent, Solana at 2.02 percent, and Ethereum at 1.5 percent.
Analysts are beginning to take notice of this trend. Joe Burnett from Unchained pointed out that Bitcoin is nearing a new high compared to the NASDAQ index, indicating that an increasing number of investors are viewing Bitcoin as a protective asset during turbulent stock market conditions.
Meanwhile, another analyst, Colin, highlighted the global money supply (M2), which suggests a potential market bottom on April 6, 2025, with expectations of recovery in May. He emphasized that this observation should not be taken as an official prediction but rather as an indication of market behavior.
On the same day, Bitcoin experienced fluctuations in its price. By 13:00 WITA, it was trading around $84,630.70 on CoinGecko and $84,696.15 on Binance. However, by 19:09 WITA, Bitcoin had dropped to $81,944.61 on CoinGecko and $81,282.10 on Binance. Market participants appeared to be cautious ahead of the Federal Reserve's interest rate decision scheduled for the early hours of April 5, 2025.
As uncertainty loomed regarding the Fed’s policy direction, investors opted to reduce trading activity. The altcoin market also reflected this sentiment, with Ethereum declining by 3.2 percent and Solana dropping 4.5 percent within the last 24 hours. Notably, a significant movement occurred when a whale transferred 130,985 SOL tokens to an exchange, triggering a sharp increase in selling pressure on Solana.
In a positive development for Bitcoin, global investment management firm BlackRock made headlines by purchasing $65 million worth of Bitcoin around 14:30 WITA, reinforcing signals of institutional adoption of cryptocurrencies.
However, not all news was positive in the crypto space. Binance announced that Pi Coin failed to secure a listing due to losing a community vote, resulting in the token’s price plummeting to $0.53, disappointing its community.
As the crypto market awaits the Federal Reserve’s announcement, traders remain hopeful for a dovish signal that could lead to a potential rise in cryptocurrency values. Conversely, if the Fed's statement leans towards a hawkish stance, renewed pressure on the market could ensue.
In conclusion, while the stock market faces significant challenges due to geopolitical tensions and economic uncertainties, the cryptocurrency market has showcased a surprising level of resilience. Investors are now more than ever considering Bitcoin and other digital assets as potential safe havens in times of financial turmoil.
