Trade Tensions Could Fuel Bitcoin Adoption: Grayscale

A new report from the asset manager highlights that Bitcoin has held steady amid recent market volatility.

By: Jona Jaupi • April 10, 2025

Trade Tensions Could Fuel Bitcoin Adoption: Grayscale

Escalating trade tensions and tariffs may drive Bitcoin adoption in the medium term, according to a new report from global asset management firm Grayscale.

Grayscale argues that such economic conditions could lead to stagflation, which tends to benefit scarce assets like Bitcoin (BTC) and gold. These challenges may also weaken the U.S. dollar’s dominance as the world’s primary reserve currency, paving the way for alternative assets like Bitcoin.

The report notes that from President Donald Trump's tariff 'Liberation Day' (April 2) to April 8, the S&P 500 dropped by about 12%. Given Bitcoin's typical volatility—about three times that of the S&P 500—this would suggest a potential 36% decline for Bitcoin if it moved in sync with the equity market. However, Bitcoin only experienced a 10% drop during this period.

“The fact that it declined only 10% during this period highlights the potential diversification benefits of holding Bitcoin in a portfolio, even during a deep drawdown,” the report reads. “Following the partial rebound on markets on April 9, both the S&P 500 and Bitcoin are down about 4% since the announcement of reciprocal tariffs.”

Comparison of Asset Classes chart — Comparison of Asset Classes

Despite trade tensions that have wiped out trillions of dollars from global markets, Bitcoin has remained steady between $78K and $80K, while most altcoins have struggled. For instance, Ether (ETH) and BNB saw losses of 48% and 13% in Q1, respectively, while tokens like Solana (SOL) and Chainlink (LINK) dropped by 31.5% and 35%, respectively.

Grayscale explained that beyond the short term, the impact of higher tariffs on Bitcoin will depend on their consequences for the economy and international capital flows.

“Taken together, rising macro demand for scarce commodity assets and an improving operating environment for investors could be a potent combination for Bitcoin adoption over the coming years,” the report concluded.

BTC is currently trading at $79,444 – down 3.3% in the past 24 hours and 3% over the past week – with a market capitalization of $1.5 trillion, according to CoinGecko.