The S&P 500 Index saw a sharp surge in volatility, briefly matching Bitcoin’s notorious fluctuations, following US President Donald Trump’s tariff announcement on April 2. This highlighted the uncertainty and fear gripping traditional financial markets amid the ongoing trade conflict.
Bloomberg analyst Eric Balchunas pointed out on X that the S&P 500’s volatility, tracked by the “SPY US Equity Hist Vol” chart, peaked at 74 in early April, surpassing Bitcoin’s level of 71.
This jump marks a stark contrast to the S&P 500’s usual volatility, which typically hovers below 20.
For Bitcoin, however, such volatility is nothing new and has been a hallmark since its creation.
According to BlackRock, “Bitcoin’s volatility remains significantly higher, 3.9 times that of gold and 4.6 times that of global equities.”
The volatility surge is a direct result of the trade war, where Trump threatened tariffs ranging from 10% to 50% on goods from major US trade partners. Though Trump has paused some tariffs for 90 days, duties on Chinese imports have increased to at least 145%.
The volatility impact has spread to other assets, especially US Treasurys, which saw a major sell-off this week. The yield on the 10-year Treasury bond is set for its largest rise since 2001.
Despite broader market relief, Bitcoin remains under pressure US stock markets enjoyed a significant rally on April 9 after Trump’s tariff delay. However, this “macro relief” didn’t extend to Bitcoin or its exchange-traded funds (ETFs), reflecting continued caution among institutional investors. Bitfinex analysts noted that after record inflows in January, ETF demand has cooled, with some products experiencing outflows in recent weeks. This suggests that major investors may be waiting for better entry points or clearer regulatory direction.
Although Bitcoin has underperformed, Bitfinex analysts remain optimistic about the asset class for the second quarter through 2025, citing new narratives like sovereign accumulation and growth in tokenized real-world assets.
Joe Burnett, Director of Market Research at Unchained, echoed similar sentiments, emphasizing that Bitcoin offers more appeal for long-term investors concerned about the risks of government policy and fiat currencies.
While the S&P 500’s recent volatility spike is likely to be short-lived, Burnett argued that it challenges the long-standing notion that traditional markets are inherently safer and more stable.
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