S&P 500 Shows More Volatility Than Bitcoin As US Assets Lose Investor Interest
Investors are moving away from US assets, pushing up Treasury yields and pushing down the dollar index and US stocks.
Author: Omkar Godbole | Edited by: Parikshit Mishra Updated: Apr 11, 2025 3:19 PM Published: Apr 11, 2025 5:30 AM
What you need to know:
- Bitcoin's volatility has declined relative to the S&P 500, making it a low-beta strategy relative to stocks.
- Investors are moving away from US assets, pushing up Treasury yields and pushing down the dollar index and US stocks.
Wall Street has criticized Bitcoin (BTC) for its volatility for years, but that changed dramatically when President Donald Trump's aggressive trade policies made the U.S. asset less attractive.
Since Trump announced the tariffs on Liberation Day on April 2, seven-day realized volatility in the S&P 500, Wall Street's main stock index, has risen from 50% annually to 169%, according to TradingView data, the highest level since the coronavirus crisis hit in 2020.
BTC's seven-day realized volatility has doubled to 83%, but remains significantly lower than the S&P 500, suggesting the cryptocurrency may be developing as a low-beta hedge versus stocks. The cryptocurrency also appears less volatile than the S&P 500 on a 30-day basis.
“Equity markets [have] seen a sharp increase in volatility, outpacing Bitcoin, which is now showing reduced volatility. This begs the question: should investors trust assets that are susceptible to political influences and human error, or a mathematical structure and a new store of value that is more resilient to such risks?” James Butterfill, head of research at CoinShares, said in a letter.
Investors are dumping US assets
The S&P 500 has gained 14% in less than two months, largely due to trade war fears that have recently become a reality. The tech-heavy Nasdaq and Dow Jones Industrial Average have also suffered similar losses, accompanied by increased volatility in global stock markets.
Risk aversion of this level has historically led investors to invest in Treasury bonds, which underpin the global financial system, and in the U.S. dollar, the global reserve currency.
But investors have been selling off Treasuries since last Friday, pushing yields higher while the dollar index has fallen. The so-called benchmark 10-year yield has risen 62 basis points to 4.45% since last Friday, and the dollar index, which tracks the greenback against major currencies, has extended its first-quarter slide to 100, its lowest since late September.
Currencies tend to strengthen when their domestic bond yields rise, unless markets are concerned about a country’s debt status, which can lead to a sharp increase in yields and a simultaneous depreciation of the currency. The Global South witnessed this in 2018.
“High yields and low currencies are common in emerging markets. We saw this in the UK during the Truss debacle. But for the US, it's extremely unusual.
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