This contradictory stance has left investors at a loss, severely impacting market confidence and quickly reacting to policy uncertainty. The "big 7" (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla) were the first to experience a selling wave, with Tesla dropping nearly 36% in the first quarter and Nvidia falling nearly 20%. As an important component of the S&P 500, the "big 7" have collectively evaporated over $2.5 trillion in market value since Trump's re-election, which is both a correction of the previous valuation bubble (S&P 500 P/E ratio of 21 times) and a "vote with their feet" against policy uncertainty. By the end of March, US stocks partially rebounded, with the S&P 500 rising to 5,767 points, reflecting market expectations of policy "softening" - that the White House might adopt a phased or exemption strategy rather than comprehensive taxation. However, it proved that the market's optimistic expectations at the time were unfounded.
It is worth mentioning that under the dynamic interaction of interest rate expectations, tariff intensity, and recession risks, some institutions have clearly pointed out that the risk-reward ratio of unilateral betting on US stocks has significantly deteriorated. For example, AQR Capital Management warned investors that in such an environment, they need to rely more on diversification strategies and must not blindly bet on a unilateral rise in US stocks.
The S&P 500, Nasdaq, and "big 7" all declined in the first quarter. BTC also suffered a double impact from market volatility and policy uncertainty. However, amid the turbulence, its performance can still be considered resilient: After experiencing severe volatility in late February, BTC did not show a unilateral decline in March but instead demonstrated a "V-shaped" oscillation with a later upward trend. The monthly decline narrowed to 2.09%, significantly outperforming the Nasdaq index's 8.2% drop during the same period. In the past, BTC's trend was highly similar to tech stocks, often rising and falling together.
However, during this market turmoil, BTC showed an independent performance.
(Image source: investing.com)
Especially in mid-to-late March, with the US SEC's abolition of SAB 121 (allowing banks to custody crypto assets), institutional increases by BlackRock, and the Federal Reserve's signal of "three rate cuts this year" on March 20, BTC saw a strong rebound. Overall, BTC's adjustment in March was more of a technical correction rather than a trend-driven decline. Zach Pandl, research director at Grayscale, believes that the market has partially "priced in" the negative impact of tariffs, and the worst selling phase may have ended.
Although the current crypto market is still overshadowed by the latest tariff policy, the US government's recognition and regulatory progress in the crypto asset field have become increasingly clear. A series of measures are paving the way for the industry's long-term development: First, on March 6, Trump signed an executive order to officially establish a "Strategic Bitcoin Reserve" (SBR), incorporating approximately 200,000 previously confiscated BTC into the reserve, clearly stating no sales within four years. This is the first time the US government has managed BTC as a permanent national asset, marking the establishment of its "digital gold" status. Although not legislation, the order lays the foundation for subsequent policies. Secondly, the SEC is gradually relaxing its historically tough stance on cryptocurrencies, having held its first crypto roundtable in March and planning four more roundtables in April, May, and June on trading, custody, tokenization, and DeFi. This shift from "enforcement-focused" to "cooperation and rule-making" is seen as a key prelude to regulatory framework implementation. Especially with the SEC's announcement to abolish SAB 121, banks can now legally custody crypto assets. After SAB 121's policy abolition, traditional financial institutions like JPMorgan and Goldman Sachs immediately launched crypto custody services, with an expected over $200 billion in institutional funds entering through banking channels by Q2 2025.
BlackRock CEO Fink's annual investor letter (source: https://www.blackrock.com/corporate/investor-relations/larry-fink-annual-chairmans-letter)
Institutional investors' enthusiasm for crypto assets, especially BTC, continues to rise. On March 31, Larry Fink, CEO of global top asset management company BlackRock, released a 27-page annual letter to investors. In the letter, Fink issued a warning with an unusually serious tone: If the US cannot effectively control its continuously expanding debt and fiscal deficit, the US dollar's "global reserve currency throne" could potentially be replaced by emerging digital assets like BTC. Notably, Fink mentioned BTC seven times and the US dollar eight times in the letter, highlighting BTC's importance in the current financial context and hinting at its potential key role in the evolving global economic landscape.
With Trump's tariff policy landing on April 2, the US economic prospects become increasingly uncertain. If the US economy does not fall into a deep recession under the tariff policy and the Federal Reserve cuts rates in June, BTC may see a trend reversal in the second quarter. During economically unstable periods, BTC's scarcity and hedging attributes will become more prominent. Once market risk appetite recovers, BTC, as an emerging asset class, fits the market's potential demand for new hedging and value storage methods, and is expected to break through key resistance levels and undergo a value reassessment.
The market swung between "stagflation concerns" and "policy mitigation" in March. In the long term, if tariffs drive up inflation and erode US dollar credit, it will force capital towards non-sovereign assets. BlackRock CEO Fink's question in the investor letter, "Will BTC shake the US dollar hegemony?" is not without reason. He reminds us that the most disruptive variable in reshaping the new global financial order has already appeared.
