Bitcoin Stumbles After Early 2025 Surge
Bitcoin surged on optimism after Donald Trump’s election win, but the euphoria faded quickly. Despite an executive order to establish a strategic Bitcoin reserve, the move fell flat with investors.
From its 2024 high of $109,000, Bitcoin has since dropped over 25%, ending the first quarter of 2025 in negative territory. As of April 10, 2025, Bitcoin is down over 13% year-to-date, facing pressure from market volatility, inflation, and the Federal Reserve’s cautious stance on rate cuts.
Bitcoin Outperforms Amid Market Turmoil
While stocks flounder, Bitcoin is quietly proving its resilience. The SPDR S&P 500 ETF Trust (SPY) lost 5.6% over the past month, whereas Bitcoin gained 2.1%. Over the past week alone, Bitcoin rose 3.7%, outpacing broader equities.
Fed Chair Jerome Powell dubbed Bitcoin “virtual gold,” while investor Ray Dalio recommended hard assets like Bitcoin to weather an impending debt crisis.
A Hedge Against Inflation
Bitcoin’s limited supply gives it an edge during inflationary cycles, unlike fiat currencies which central banks can print endlessly. With Trump’s import tariffs potentially stoking global inflation, Bitcoin’s role as a store of value is gaining credibility.
Institutions Fuel Bitcoin Momentum
Corporate adoption is also accelerating. While MicroStrategy (MSTR) has led the charge, new players like GameStop (GME), Semler Scientific, and Rumble (RUM) are now adding Bitcoin to their balance sheets.
Such adoption strengthens Bitcoin’s institutional credibility, increases buying pressure, and supports its long-term price outlook.
Potential for Rate Cuts
Though Powell recently adopted a less dovish tone, signs of economic slowing due to tariffs may force the Fed to cut rates. Lower interest rates usually benefit risk-on assets like Bitcoin, which don’t generate yield but thrive in low-rate environments.
Technical Indicators Suggest Strength
The iShares Bitcoin Trust ETF (IBIT) closed at $45.17 on April 10, 2025. Its 200-day moving average (MA) is $44.66, while the 50-day MA is $50.45. This configuration typically signals a long-term uptrend, even amid short-term corrections.
Bottom Line
Despite Bitcoin’s rocky start in 2025, multiple factors suggest that current price levels may represent a strategic entry point. From institutional adoption and macroeconomic tailwinds to its inflation hedge properties and strong technical setup, Bitcoin could rebound sharply if trade tensions ease or rate cuts arrive.