Stock market volatility briefly surpasses Bitcoin amid tariff drama

In an unusual turn of events, recent data has shown that stock index volatility reached high levels that brought it on par with the volatility of the world’s most popular cryptocurrency, Bitcoin. The relatively stable traditional asset markets tested turbulent waters thanks to last week’s market activities that saw investors reacting to the tariffs issued by President Donald Trump.

Bitcoin has been known for its high volatility and sharp price swings, but data from Nasdaq composites volatility over the past 30 days shows that it surpassed Bitcoin for the first time last week after President Trump reportedly put a hold on tariffs for most countries apart from China for 90 days. 

For China, Trump increased the tariffs targeting the country.

High volatility in the cryptocurrency space has been a constant feature and it’s one of the few things that set’s it apart from the equities market. However, recent trends show that it’s gradually changing as pointed out by industry observers. 

The volatility landscape is changing 

For the first time in a long time, Nasdaq’s 21-day realized volatility overtook Bitcoin’s 30-day volatility, reaching 59.8% compared to Bitcoin’s 46.4% on April 10, according to data from Dow Jones Market Data.

It’s important to note that Bitcoin trades around the clock, 24 hours a day, seven days a week, while U.S. equities only trade on weekdays from 9:30 a.m. to 4 p.m. ET. This wider trading window can sometimes smooth out extreme fluctuations in crypto as pointed out by analysts. 

However, the market experienced some resurgence on Monday, ending on a high note after the Trump administration announced that it would exempt smartphones, electronic integrated circuits, and some consumer-electronics products as well as machines used in making semiconductors from the tariffs. 

Although the White House has added that these exemptions were temporary.

Analysts have also pointed out that tariffs affect the stock market directly as they impact the actual companies listed there and their profit margins, which in turn impacts consumer and investors’ confidence. Bitcoin, on the other hand, is relatively insulated or not as impacted by the effects of tariffs. 

Greg Magadini, the director of derivatives at crypto-data platform Amberdata, has also highlighted another guardrail for Bitcoin’s volatility. Magadini noted that Bitcoin’s volatility has been on a decline in part due to institutional involvement, especially after the launch of Bitcoin exchange-traded funds (ETFs) last year.

Policy stability and regulatory shift may be the answer

The Donald Trump administration is known to have a pro-crypto regulatory stance, which stakeholders also see as influential in relatively stabilizing Bitcoin. The president signed executive orders to create a federal framework for digital asset regulation and even proposed the establishment of a national Bitcoin reserve.

Trump’s stance on crypto marks a major shift from the Biden administration. Under the new administration, the Securities and Exchange Commission has dismissed lawsuits against several crypto companies, and the President has pardoned some players in the crypto space convicted for crypto-related crimes, such as former BitMEX CEO Arthur Hayes.

The reduction of speculative volatility may be attributed to these moves boosting institutional confidence in Bitcoin.

While it remains to be seen whether this trend continues, the recent convergence in volatility between equities and Bitcoin suggests a changing narrative.

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