Can Bitcoin replace gold as the go-to safe-haven asset? Explore how 2025's market turmoil reshaped investor sentiment toward BTC vs. gold.

The early months of 2025 have proven tough indeed for the stock market. After the newly elected POTUS Donald Trump was sworn in in late January, he quickly raised the issue of tariffs on imports to the US, a key pledge from his election campaign. The market reacted nervously, with the S&P 500 and Nasdaq-100 dropping 10% and 14% (respectively) between February 20 and March 12, some of the steepest declines for equities in many years.

 (BTC) joined the stock market during the February-March slump, shedding about 18% of its value. Needless to say, the ultimate safe-haven asset, 

, gained handsomely during the slump, as often happens during periods of uncertainty and stock market corrections or crashes.

However, another major stressor awaited the markets in April 2025. Trump's “Liberation Day” executive order imposing across-the-board import tariffs on most countries ignited another sell-off in equities. Barely coming to their senses after the February-March knockdown, US stocks absorbed another major hit. Yet, on this occasion, Bitcoin reacted altogether differently — the world's leading cryptocurrency rallied strongly after April 7, posting a completely divergent performance from that of the stock market.

Bitcoin's April rally, which is continuing into early May, has led many analysts and investors to ask a novel question: Has BTC become a new kind of safe-haven asset that can protect your investment during stock market declines? And if so, can Bitcoin actually overtake gold as the safe-haven asset of choice? In this article, we’ll examine the 

 comparison through the lens of an investor looking for the optimal safe-haven asset, for now and for future 

 in equities, which some analysts believe will be in abundance under the current White House administration.

Bitcoin's journey to recognition as a legitimate investment asset hasn't been easy. For years after its 2009 launch, it was largely viewed as a technology shtick with no real-world value. However, the seminal digital asset started to gain recognition in the investment mainstream amidst news of its undeniably gigantic returns.

The first notable Bitcoin bull run was the 2017 mega-rally. Having begun the year valued at around $1,000, BTC was worth $14,093 on the last day of December, a return on investment of more than 13,000%. Investors 

In early 2018, Bitcoin began to lose ground, steadily shaking off its remarkable 2017 gains. Until late 2020, Bitcoin couldn’t return to these late-2017 levels, a three-year fall from grace. Consequently, investors and traders viewed it largely as 

 and speculative, with little chance of regulatory acceptance into the mainstream finance world.

However, Bitcoin’s ability to thrive during periods of wider economic turbulence clearly manifested itself for the first time amidst the 2018–19 US-China trade war. Between mid-2018 and mid-2019, the US and China imposed tariffs on each other’s imports, igniting the first modern trade war between the two nations. While most markets experienced turbulence or declines, Bitcoin rallied strongly between April and June 2019, right at a time when the impact of tariffs was being felt throughout the economy.

Interest in Bitcoin as a legitimate investment asset skyrocketed between late 2021 and early 2024, thanks to enthusiastic institutional investor acceptance. In October 2021, the Securities and Exchange Commission (SEC) approved the first 

 (ETF). Then, in January 2024, the SEC provided a bulk 

As a result of these approvals, institutional investors rushed to Bitcoin, propping up its price and establishing it as a mainstream investment product.

Until April 2025, Bitcoin's reputation remained that of an extremely volatile, high-risk and high-reward asset. In recent times, it also fell largely in line with the stock market's direction as a classic, high-growth asset. But when the second Trump administration announced wide-ranging tariffs on Apr 2, 2025, named “Liberation Day,” BTC’s performance diverged notably from that of the stock market.

Major stock indices, such as the S&P 500 and Nasdaq-100, declined sharply in early April, and then began a slow and uncertain recovery from those losses. In contrast, Bitcoin, after a quick dip from April 2–7, rallied strongly afterward. As of May 7, 2025, it’s up approximately 29% from a month ago.

Bitcoin's strong performance beginning in April 2025 — at a time when the stock market dealt with losses, uncertainty and dismally low investor confidence — prompted comparisons with the classic safe-haven asset, gold. The question now is: Has Bitcoin evolved into a safe-haven asset, perhaps a more volatile counterpart to gold?

For thousands of years, gold has been valued by humans as a reliable store of value, as well as a currency. Its reputation as a safe-haven asset during times of economic uncertainty and declines is well-known. One of the most actively traded assets in the financial world, the yellow metal tends to attract investors trying to protect their wealth when the stock market is sliding.

While gold has been an ultimate store-of-value asset traded worldwide for millennia, the first modern mechanism for setting its market price was first established in 1919 in London. In September 1919, five major gold bullion traders — N.M. Rothschild & Sons, Mocatta & Goldsmid, Pixley & Abell, Samuel Montagu & Co. and Sharps & Wilkins — agreed (via regular meetings or telephone calls) to set a unified market price for gold.

Gold's popularity and its standing in the global financial system were dealt a massive blow in 1933, when US President Franklin Roosevelt signed an executive order that required Americans to turn over their gold holdings to the government for a fixed price of $20.67 per troy ounce. Aside from small quantities, private ownership of gold was now forbidden. Such draconian restrictions on gold lasted until 1974, when US President Gerald Ford repealed the order; but the effective ban on private ownership of gold in the US between 1933 and 1974 severely limited trading activity for the metal commodity.

Following the repeal of Roosevelt's gold-banning executive order, gold 

 commenced on Dec 31, 1974, on the COMEX futures exchange in New York. This signified the start of the modern era for gold trading on regulated financial markets. Once again, gold became one of the world’s key asset classes. Since then, gold has typically, though not always, had negative correlations with the stock market, and has acted as a safe-haven asset during equity bear markets.

Investing in Bitcoin vs. investing in gold

In recent years, both gold and Bitcoin have done well. It should be noted that investors have rarely viewed gold as a growth asset. Instead, its role has been that of a value protector during market declines. The table below shows the return rates for gold, Bitcoin and the stock market’s primary index, the S&P 500, for short-term periods (the past month and six months), as well as longer-term periods (the past year and five years). These figures are valid as of May 7, 2025, and are based on data from TradingView.

The data in the table clearly demonstrates that Bitcoin has performed better than gold (or stocks, for that matter). At the same time, gold has also done its job of protecting investment value, significantly outperforming the stock market over the past month, six months and 12 months — periods strongly affected by the recent and ongoing tariff wars ignited by the Trump administration. For instance, an average stock market investor has actually incurred small losses (of –0.7%) within the past six months, while gold investments have grown by a respectable 18% during the same period — an outstanding result in the current gloomy economic climate.

Over the long-term period of five years, gold and the S&P 500 have seen growth rates of similar magnitude (90.5% and 98.2%, respectively) during times of both market optimism/growth and stock declines (e.g., the first half of 2022, during which the S&P 500 dove 23%).

While gold has simply done its job as a hedge against stock market troubles, Bitcoin has done exactly that and more — its performance over these four analysis windows indicates that the world’s top cryptocurrency has acted as a safe-haven asset on steroids, delivering both protection against bear markets in equities and significant returns.

While Bitcoin has resoundingly beaten gold in terms of historical performance in recent years, it should also be noted that it remains more volatile than gold — with one crucial caveat: Bitcoin’s volatility over the past year (as measured by the coefficient of variation) is around 20%, while the same coefficient for gold (over the same yearly period) is 10%. 

Although Bitcoin is twice as volatile as gold, based on these estimates, these figures don't exactly paint a picture of an asset that’s wildly more volatile than gold, as many investors believe. Moreover, in the first four months since the start of 2025, the two assets have had an even smaller difference in terms of volatility — 8.3% for Bitcoin and 6.8% for gold, based on their daily prices.

Clearly, the new market realities are challenging old beliefs. Although Bitcoin remains more volatile than gold, the difference in volatility levels between the two assets may no longer be as large as it was in the past — at least during periods of significant price moves for gold, as in recent months.

Gold has traditionally been viewed as an excellent hedge against inflation, as well as even more extreme events, such as currency devaluation. It typically retains its value or grows in times during which fiat currencies may lose their real purchasing power due to inflationary pressures.

Bitcoin, on the other hand, hasn't traditionally been considered an inflation hedge. For all of 2022 and much of 2023, high inflation prevailed in the US. During these two years, Bitcoin behaved completely differently: it kept falling throughout 2022, but rallied strongly for most of 2023. This indicates that it may not yet exhibit one of the key properties of a safe-haven asset — the ability to hedge against inflationary value losses.

Both gold and Bitcoin feature liquid and vibrant markets. However, gold's liquidity is far higher than that of Bitcoin. Daily trading volumes for gold are typically between $200 and $300 billion, while Bitcoin's are about one-tenth of these figures. Gold's market cap stands at over $22 trillion, whereas Bitcoin's capitalization is $1.9 trillion, around 11.5 times lower.

Gold is easily accessible for institutional and retail investors via brokerages that offer gold-linked ETFs and gold-based futures contracts. You can also purchase physical gold in the form of gold coins and bullion.

Bitcoin is also a relatively easily accessible asset, as long as you’re crypto-savvy. It can be traded on 

 (DEXs) and directly through the Bitcoin blockchain via the 

 route. However, investors unfamiliar with blockchain technology (or those who prefer to stick to regulated exchanges) may find Bitcoin less accessible than gold.

, which are linked directly to blockchain addresses or to accounts at crypto exchanges. While holding funds in such a wallet is generally safe if you follow all the due diligence procedures, 

 do take place in the blockchain world. During such hacks, your BTC funds held in a crypto wallet might be compromised or even lost.

There are certain storage and security concerns for gold as well — at least if you invest in physical gold, rather than gold ETFs or futures. Bullion and other types of physical gold need to be securely stored. There are many gold storage providers on the market. These companies can keep your physical gold safe. However, there are fees involved for having your gold protected at these providers' secure premises. Additionally, these companies may be vulnerable to criminal activity and theft of the stored gold, although reputable providers have proven and reliable security standards.

Both gold and Bitcoin involve regulatory and market risks. Although gold is widely accepted in regulated markets, there might be issues with 

 arising from trading gold, particularly in the case of cross-border transactions. It should also be noted that gold is a non-sovereign asset — that is, it’s not issued or supported by governments or central banks, although they may use it as a reserve asset. Thus, gold's value is guaranteed only by market demand.

Bitcoin is much less regulated than gold. Although the US is moving toward comprehensive regulation for cryptocurrencies, a unified framework in this area still doesn’t exist (as of early May 2025). At the same time, a number of SEC-approved Bitcoin Spot and Futures ETFs provide access to the asset via the regulated environment of stock exchanges.

Similar to gold, Bitcoin is a non-sovereign asset, sometimes even referred to as digital gold. Its decentralized nature ensures independence from any government. Like gold, Bitcoin's value is derived solely from market demand.

Gold is among the most stable and secure assets in financial markets. The precious metal tends to retain its value and rise during periods when those of growth-oriented assets decline. However, prolonged bull markets can dampen the long-term performance of gold, at least relative to other investment opportunities. Over a sufficiently long period (e.g., five years or more), we may expect the stock market to go through periods of both growth and decline. While bear markets in equities are likely to boost gold, bull runs may lead to it losing ground.

In an earlier section of this article, we noted that gold and the S&P 500 performed quite similarly over the past five years. This time interval in the US economy involved several adverse events — the stock market decline of H1 2022, high inflation in 2022 and 2023 and, most recently, market slumps in February and April 2025 caused by Trump's notorious tariffs. Thus, gold has done its job of protecting investor value over the long term during these five years. 

At the same time, although these years involved several uncomfortable periods for stocks, gold hasn't been able to outperform the S&P 500 at all, posting an 80% five-year growth rate vs. 99% for the stock market index.

This is the whole idea behind investing in gold — it’s rarely a growth-oriented exercise, and is almost always an endeavor to protect yourself against losses.

In contrast, Bitcoin remains a growth asset, albeit one that has recently demonstrated potential to act as a safe-haven asset in times of stock market adversities. Its long-term value is also closely linked to its issuance and supply-limitation mechanisms. New Bitcoin is mined every ten minutes on the BTC network, with the release schedule subject to quadrennial 

Additionally, Bitcoin’s maximum supply is 

. Per the Bitcoin blockchain’s rules, there will never be more than 21 million BTC in existence. However, Bitcoin will only reach this limit around 2140. Bitcoin's limited supply, regular halvings and supply capping make it a scarce asset. Even though Bitcoin may not repeat its massive gains of yesteryear, the crypto's deflationary properties will continue to support its price in the future.

From a safety perspective, gold remains the preferred choice. In times of bear markets and economic uncertainty, gold does its job of protecting your funds from losses. Compared to Bitcoin, it's less volatile, more liquid and better regulated.

However, your safe-haven portfolio doesn’t have to be based on a single asset. Diversifying your investment for bear markets should ideally involve both an established and an emerging safe-haven asset. Bitcoin’s latest run in April 2025 demonstrated that it can work to counter potential slumps in equities. Additionally, Bitcoin has delivered better returns than gold over both short-term and long-term periods.

As such, a prudent strategy would involve allocating some of your funds to gold as a safe, regulated, low-volatility and highly liquid asset, while investing the remainder in Bitcoin as an emerging safe-haven asset that’s high-growth and volatile, but still sufficiently divergent from stocks.

Bybit offers you three ways to invest in gold — via 

 and crypto Perpetual contracts based on gold-backed cryptocurrencies (e.g., 

). For Bitcoin investing, the exchange offers you several options, including

While Bitcoin, the king of digital currencies, may not replace gold any time soon as the safe-haven asset of choice, it may be a viable addition to a portfolio designed to withstand stock market troubles. Bitcoin's high-growth nature, coupled with its emerging ability to thrive at times of capital flight from stocks, positions it as a new type of safe-haven asset — one that may not rival gold's stability and security, but can nevertheless act as a great diversifier for and counterbalance to the world’s most famous precious metal. Thanks to Bitcoin, safe-haven portfolios can focus both on value protection and growth, not merely on the former.

Intermediate

safe-haven asset.png

Can Bitcoin overtake gold as the ultimate safe-haven asset?

Learn about USDT-settled crypto perpetuals, one of the most popular crypto derivatives product, how they work and how you can start trading them.

Crypto perpetuals futures are a type of derivatives product that allows traders to gain exposure to cryptocurrencies with leverage. Traders have the flexibility to go 

 on crypto assets, and keep their positions open for indefinite periods. 

With USDT perpetual futures on Bybit's intuitive and user-friendly trading platform, you can realize these benefits with futures contracts settled in USDT, a leading 

This article will introduce you to USDT-settled crypto perpetuals, and explain how they work and how you can start trading them. No worries — we'll guide you through each step you need to take to get started with USDT perpetual futures trading on Bybit.

What Are USDT Perpetual Futures Contracts?

 are crypto perpetuals settled in Tether USD (USDT), a stablecoin pegged to the U.S. dollar (USD).

 As derivatives, cryptocurrency perpetuals enable you to trade an underlying asset like Bitcoin (BTC) or Ethereum (ETH) without an expiration date. While you are obliged to buy or sell traditional futures at expiration, you can hold crypto perpetual contracts indefinitely.

Crypto perpetuals allow you to use leverage to amplify your potential returns and keep your positions open for indefinite periods. They also offer you the flexibility to profit from both upward and downward price movements with long and short trades. Perpetual futures trading can also help you hedge against market risks without owning the underlying asset.

On Bybit, all settlements, margin, and profit and loss (P&L) calculations are denominated in USDT for linear USDT perpetuals. On the other hand, 

, which you can use to generate returns when crypto prices fall, are settled in the underlying asset.

Tether USD (USDT) is the leading stablecoin by market capitalization. As of May 8, 2025, it 

 a $149.5 billion market cap, and a $27.54 billion trading volume in the past 24 hours. USDT is issued and managed by the British Virgin Islands–based Tether Limited. It's owned by iFinex Inc, the same company that operates the Bitfinex cryptocurrency exchange.

USDT is a fiat-pegged stablecoin that closely follows the price of the U.S. dollar. To ensure the stablecoin's price stability, Tether maintains physical reserves, of which nearly 84% is 

Top Bybit USDT Perpetual Futures by Trading Volume

Bybit has a wide selection of USDT perpetuals that you can trade to speculate on the prices of underlying assets.

As of May 8, 2025, the top five USDT perpetual contracts by 24-hour trading volume on Bybit are 

How Do USDT-Settled Crypto Perpetuals Work?

, crypto perpetuals don't have an expiration date, and can be held indefinitely. Since they don't expire, no physical delivery of the underlying asset is necessary. Instead, perpetual contracts are settled in cash, and their primary purpose is to enable traders to speculate on crypto prices without owning the underlying asset. On Bybit, settlement takes place in the USDT stablecoin for USDT perpetuals, and USDC for 

Because they lack an expiration date, crypto perpetuals rely on the funding rate mechanism to track the underlying asset's price. The funding rate can be positive or negative, and can change based on how close the futures price is to the spot price.

A positive funding rate indicates an overall bullish market sentiment. When the futures price is trading at a higher level than the spot price, buyers (longs) are required to pay sellers (shorts) the funding amount. In contrast, a negative funding rate is generally a signal of bearish market sentiment. Here, longs pay shorts the funding amount (as the futures price is lower than the spot price).

Key Metrics for USDT Perpetual Futures Contracts

In addition to the funding rate, some of the key metrics of USDT perpetual futures contracts include the following.

Bybit is a user-friendly and intuitive trading platform with a wide selection of USDT perpetuals. Thus, it’s an excellent choice for both veteran traders and beginning traders seeking to dabble in perpetual futures trading.

In the following section, you'll find a comprehensive guide that guides you through each step to get started with crypto perpetual futures trading on Bybit.

The first step to get started with USDT perpetual futures trading on Bybit is to open a 

. A UTA is mandatory in order to trade perpetuals on the platform. and will provide you with a tailored trading experience, account finances and 

For new users, Bybit will automatically open a UTA. Simply 

If you have a Standard Account with Bybit, you can upgrade it to a UTA by clicking on 

You can also upgrade your account by clicking on 

After reading the account's details, as well as acknowledging Bybit's Trading Rules and Terms of Service, click on 

Once your Unified Trading Account is ready, the next step is to fund it with crypto or fiat currency. Head to the 

Select your preferred cryptocurrency, the blockchain from which you’ll make the transaction, and 

 for auto-channeling deposits. Always ensure that you’ve chosen the correct network in order to prevent a loss of funds. After doing so, copy/paste the wallet address or scan the QR code with your phone's camera to initiate the deposit from your wallet.

You can also fund your account with fiat currency via the 

With a funded Unified Trading Account, it's time to open a new USDT perpetuals position on Bybit. To do that, click on 

 tab. In this guide, we’ll open a position in the 

After analyzing the chart and determining an entry point, use the trading widget on the right to open your position.

, which will apply to your account. You can choose between the following options.

Once you’ve chosen your margin mode, the next step is to set the leverage for the trade. Use the slide to select a value between 1x and 100x, and click on 

Next, select an order type for your trade from the following choices.

After selecting your order type, set the order amount for the trade. You can order either by quantity, denominated in the underlying asset, or by value, denominated in USDT.

order to manage your risks efficiently. You can do that by ticking the box next to 

 to open a short USDT perpetual position. Your order will automatically be executed by Bybit's robust matching engine, based on the provided parameters.

Step 4: Manage Your Crypto Perpetuals Positions

 at the bottom of the trading page. In this menu, you can view and manage all your past and current orders and their P&L.

Maintenance Margin Requirements for Leveraged USDT Perpetual Positions

A margin balance is necessary to keep your USDT perpetuals positions open on Bybit. Margin is calculated based on individual positions for both isolated margin and cross margin accounts. 

However, you can only use the settlement asset (USDT) to trade USDT perpetuals in 

. If the market price reaches the liquidation price, liquidation is triggered

On the other hand, Bybit converts all the collateralized assets in your account into USD value in 

 mode. Unlike for isolated accounts, a liquidation is only triggered when the account MMR reaches 100%.

How to Calculate Position Sizing Using Position Calculator

In perpetual futures trading, position sizing determines the amount of capital you put at risk. It’s a critical aspect of risk management that helps you decide the optimal size for your trades.

You can use Bybit's Calculator by clicking on the 

 icon next to the leverage settings in the trading widget to estimate the right sizing, based on your 

For example, suppose you go long on the BTCUSDT crypto perpetuals contract. With a 1 BTC order quantity and 10x leverage, you can generate a 14.48% return on investment (ROI) with 1,070.5 USDT in profits by opening your position at the price of 73,929.5 USDT and closing it at 75,000 USDT.

Advanced Tools for USDT Perpetuals Trading

You can also take advantage of the following advanced tools to trade USDT perpetuals.

Getting Started With USDT Perpetual Futures on Bybit

Crypto perpetuals allow you to amplify your position size with leverage, and open both long and short positions without an expiration date.

With Bybit's user-friendly and intuitive trading platform

,you can trade a wide selection of USDT futures with competitive fees, up to 100x leverage and access to top-tier liquidity.

However, understanding the risks involved and efficiently managing them are critical for traders' long-term success in the perpetual futures market. Tools such as Stop Loss and Take Profit orders can help reduce your potential losses and maximize profits.

usdt perpetuals.png

How to Trade USDT Perpetual Futures on Bybit

While tariffs directly target traditional goods and services, their impact extends to the crypto market because of their potential to set off a chain reaction of inflationary pressures.

In recent times, tariffs have reemerged as a powerful force reshaping not only global trade but also the broader financial landscape — including the fast-evolving world of crypto. While traditionally aimed at protecting domestic industries or leveraging geopolitical influence, tariffs now send ripples far beyond their original targets, fueling inflationary pressures, amplifying market uncertainty and triggering sharp swings in risk sentiment across asset classes. 

As recent US tariff escalations have shown, crypto markets are increasingly sensitive to these macroeconomic shocks, with Bitcoin and other digital assets experiencing pronounced 

 and capital outflows in response to new trade barriers. Against this backdrop, understanding the way tariff policies intersect with crypto market dynamics is crucial for traders seeking to navigate the months ahead.

Curious as to how you can do so? From covering the basics of tariffs to diving into actionable strategies for crypto traders, we’ll share everything you’ll need to know about the impact that tariffs may have on the crypto market in the coming months.

Tariffs are taxes levied on imported goods, often used to protect domestic industries or influence geopolitical strategies. 

While they primarily target traditional sectors like manufacturing, their indirect effects on financial markets can be significant because tariffs increase the overall uncertainty about future corporate earnings, economic growth and international trade stability, leading to shifts in trader sentiment and asset valuations.

Tariffs are taxes imposed by governments on goods imported from other countries. Typically calculated as a percentage of the product’s value, tariffs are paid by the importing company when goods cross the border. For example, a 10% tariff on a $1,000 product means the importer pays an extra $100 to the government. It’s important to note that, while tariffs are paid by importers, the increased costs are often passed on to consumers through higher prices, thanks to the relationship of demand elasticity between consumer and producer.

There are several types of tariffs, each serving different economic or political objectives. These can range from percentage-based 

 tariffs to specific tariffs that charge a flat tax based on the quantity of the imported goods.

If tariffs are considered such a controversial policy, why do some administrations still choose to rely on them? Here are some possible reasons why they could be deemed effective.

Protectionism and the guarding of key industries

A key reason for tariff implementation is protectionism. Tariffs make imported goods more expensive, giving local producers a price advantage that helps domestic industries compete on the global stage by granting them a price edge. Tariffs also effectively protect industries vital to national defense or critical supply chains, ensuring domestic control over essential sectors and sustaining jobs in sectors that are considered essential.

In countries with limited tax infrastructure, tariffs provide a straightforward way to raise government income by taxing imported goods at the border. This allows governments to collect funds without the administrative complexity or compliance challenges of income and/or corporate taxes. Since tariff revenue is directly tied to the volume and value of international trade, it can represent a significant and reliable stream of income, particularly for trade-dependent economies.

Tariffs are often used not just to protect domestic industries, but also as deliberate tools of geopolitical strategy. By making foreign goods more expensive, governments can exert economic pressure on other nations, aiming to influence their policies or prompt behavioral changes — all without resorting to direct conflict.

How do tariffs affect the global economy?

Tariffs have far-reaching effects on global economic dynamics. When one country imposes tariffs and reciprocal tariffs then come into play, it can lead to several key outcomes.

Overall, tariffs introduce uncertainty and can dampen global economic performance, with the potential to disrupt supply chains, reduce investment and increase volatility in financial markets.

Which countries are most impacted by tariffs?

By now, you’ve probably seen the chart detailing how the US will tariff countries based on the amount of trade deficit between both nations, with heavier tariffs being doled out to countries that have deeper trade deficits with the US. This can be used as a rough gauge as to which countries will be most impacted by the tariffs.

On a deeper note, while it’s impossible to pinpoint the exact impact of tariffs on any given nation’s economy, given that tariff policies are in constant flux, we can instead rely on trade data and reports from international institutions like the IMF and WTO to identify countries whose economic structures make them particularly vulnerable. These often include the following:

While tariffs directly target traditional goods and services, their impact extends to the crypto market because of their potential to set off a chain reaction of inflationary pressures. Given crypto’s perception as a risky, high-

 asset, here’s how tariffs could impact the crypto market in the months to come.

Tariff announcements often trigger sharp swings in crypto prices. For instance, after the announcement of new US tariffs in early 2025, Bitcoin and other crypto projects initially experienced significant declines as investors reacted to heightened uncertainty.

As previously mentioned, tariffs create economic uncertainty that can cause traders to react by adopting a 

 approach, shifting capital away from volatile assets like crypto and toward traditional safe havens, such as gold and government bonds.

Tariffs can contribute to higher inflation by raising the cost of imported goods. In response, central banks may increase interest rates in order to control inflation, which can reduce liquidity and demand for speculative assets such as crypto.

, can raise operational expenses, potentially reducing crypto mining profitability and impacting network security.

In countries facing currency devaluation due to tariffs, 

 can eventually become more attractive as a store of value or as a tool for cross-border transactions, due to their innate ability to bypass traditional financial systems and currency depreciation risks.

How should crypto traders respond to tariffs?

standpoint, tariffs introduce a layer of macroeconomic risk that crypto traders cannot ignore, given their far-reaching implications across financial markets. As such, the following are some possible ways traders can manage their risk while taking into account tariff volatility.

With inflation likely to become a problem down the line, traders are increasingly turning to assets that can help preserve purchasing power in the face of rising prices. To protect against the waning value of fiat money, 

 are gaining traction as hedges against inflation. This is because they’re perceived as scarce assets with limited supply, unlike fiat currencies, which can be subject to quantitative easing and potential devaluation. 

Gold has a long history as a store of value that holds its purchasing power over time, while 

 are increasingly seen by some as a form of digital scarcity that could similarly act as a hedge against the erosion of value in traditional currencies due to inflation.

Experienced crypto traders who are familiar with 

 and neutral trading strategies can capitalize on tariff-induced market swings through targeted volatility plays. This can include 

 around key tariff announcements during price swings. Straddles are well-suited for such scenarios, as traders don’t want to risk by predicting market direction, but see that the likelihood of a volatility-induced price spike is high.

Another trusted strategy that relies on volatility spikes is that of asset pair trades. This involves going long on one asset and shorting the other in order to hedge against volatility spikes observed after major catalysts. By identifying asset pairs whose relationships are likely to normalize after the initial shock subsides, and adopting a neutral approach, this strategy can potentially be lucrative, even if the overall market is trending downward — which is likely to occur as long as the relative price movement between the pair is favorable.

Though tariffs are designed to protect domestic industries and influence international relations, they often have complex and far-reaching effects on the global economy and its financial markets. For the crypto market, tariffs introduce additional volatility, influence investor sentiment and can also alter the landscape for both trading and mining operations. 

While some may view crypto as a potential hedge in times of economic uncertainty, the reality is nuanced and highly dependent upon broader market conditions and policy responses. As such, staying informed and understanding these dynamics is essential for anyone planning to trade in the ever-evolving world of digital assets.

how do tariffs affect crypto market.png

How will tariffs impact the crypto market over the next three months?

Ethereum has launched the Pectra upgrade, its most ambitious update yet, introducing wallet smart contract features, improved validator economics, and enhanced scalability.

The S&P 500 rose 0.43% on Wednesday as markets steadied after the Fed held rates unchanged and signaled caution on future cuts amid inflation and unemployment risks. Gold dropped over 2% to $3,371 after the Fed held rates and US-China talks lifted the Dollar, though central bank buying supports long-term demand. The Coindesk Indices, which tracks the broader crypto market, rose 2.09%, with Bitcoin and Ether up 1.32% and 1.15%, in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is EOS, which rose by 19.9% after Vaulta announced it will rebrand and swap the $EOS token for $A on May 14.

Vaulta (EOS), founded in 2017, formerly EOS, is a fast, low-cost blockchain for DApps using Delegated Proof-of-Stake (DPoS) and EOS.IO software. It offers sub-second block times and the EOS VM WASM engine for improved transaction speeds. With smart contracts written in C++, Vaulta allows easy upgrades for developers. On May 14, 

, with a 1:1 token swap and no changes to tokenomics or fees. Users can swap at swap.vaulta.com.

Check out the latest prices, charts, and data of 

, its most ambitious update yet, introducing wallet smart contract features, improved validator economics, and enhanced scalability. Key changes include EIP-7702 (account abstraction for simpler wallet use), EIP-7251 (raising validator staking limits to 2,048 ETH), and EIP-7691 (doubling blob throughput to reduce Layer 2 costs). The upgrade lays groundwork for smoother DeFi experiences and future scalability, though challenges like increased validator demands and the need for even greater Layer 2 capacity remain. The next upgrade, Fusaka, aims to further simplify Ethereum’s user experience.

Yesterday, BTC spot ETFs saw $105.1M in net inflows, all from non-GBTC funds.

, with launch details coming soon. Users can collect daily Credits, which will boost their airdrop allocation, and participate in the Kaito Pre-TGE Yapper Leaderboard, which allocates 0.75% of the total supply. They also introduced the "Recurring Buy Agent," a tool that automates regular token purchases using USDC, even when users are offline.

Beginner

4.png

Ethereum’s Pectra upgrade unlocks smarter wallets, higher staking, and layer 2 scaling

Bybit Learn

Crypto Insights

blockscholes

Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, as well as futures, options and perpetual contracts.

Bybit X Block Scholes Crypto Derivatives Analytics Report (Jan. 29, 2025)

Intro_to_Crypto_Derivatives_Report_(Jan_29_2025)_1.png

Intro_to_Crypto_Derivatives_Report_(Jan_29_2025)_2.png

Intro_to_Crypto_Derivatives_Report_(Jan_29_2025)_3.png

Markets faced a significant risk-off event early this week as DeepSeek's LLM announcement coincided with sharp declines in major indices and crypto markets. Despite the volatile sell-off in spot markets, open interest in perpetual swaps remained stable, with funding rates briefly turning negative before recovering. 

Options markets saw an increase in trading volume during the sell-off, although forward-looking volatility expectations declined. The period of positive funding rates for perpetuals ended due to bearish spot price action on Monday. In the options space, realized volatility fell below implied volatility, reflecting a small-scale repeat of the pre-inauguration term structure inversion. Notably, ETH options maintained a volatility premium over BTC options, while longer-dated volatility smiles exhibited a bullish skew toward out-of-the-money (OTM) calls.

Please check out the report’s highlights.

Options open interest data shows minimal change over the past week, except for the expiration and reopening of short-dated options. Despite the largest single-day trading volumes in call options this month — nearly $250M during the spot price sell-off — trade volume did not significantly impact volatility, which has declined for both realized and implied metrics. Positioning has split between short- and longer-tenor volatility smiles. Short-tenor options are exhibiting lower volatility and a neutral skew, while longer-dated volatility smiles are reflecting increased volatility expectations and a persistent bullish skew toward OTM calls, as has been the case since the election.

ETH options trading volume has surged over the past week, marking its strongest levels in a month. While late December 2024 and early January 2025 saw robust activity, recent data indicates a more active calls market, with open interest remaining heavily weighted toward calls. The early-week global market sell-off briefly shifted short-tenor ETH volatility smiles away from calls, reminiscent of the volatility term structure inversion seen before the inauguration. Despite ETH's spot recovery being weaker than BTC's, its options have maintained higher volatility levels.

Following last week's rally in spot price due to the launch of two presidential meme coins, Solana's price has retreated with the broader crypto market. However, positioning from the rally remains largely unchanged, with open interest in puts and calls remaining elevated and trading activity surpassing pre-rally levels. The stable levels of newly opened put options likely reflect protective buying intended to hedge profitable long positions in other instruments.

Bybit X Block Scholes Crypto Derivatives Analytics Report (Jan 29, 2025): Options Market Recovers From Monday’s Sell-Off

Compete for 2,500 USDT Every Week

Earn Points by Completing Tasks

Event Rules

Weekly Leaderboard