- NASDAQ stagnation may limit Bitcoin’s recovery and hinder near-term growth.
- U.S. tariffs fuel inflation fears, making Bitcoin a hedge against purchasing power loss.
- Bitcoin’s fixed supply offers protection against potential dollar devaluation risks.
Bitcoin may have reached impressive heights this year, but its near-term path forward is far from certain. The flagship cryptocurrency has recently struggled to hold its ground, dropping over 9% in the past week.
While some investors remain optimistic, macroeconomic signals paint a more cautious picture. A stagnating NASDAQ 100 and rising inflationary pressures could delay or even derail Bitcoin’s recovery. Even if the current market correction slows down, a meaningful rebound in Bitcoin’s price might remain elusive.
Historically, Bitcoin has shown a strong correlation with the NASDAQ 100, especially during periods of tech stock booms. When the NASDAQ’s 12-month return climbs above its historical average of around 20%, Bitcoin tends to thrive.
However, when returns dip below that line, Bitcoin often loses momentum and becomes more susceptible to severe corrections. As of April 2025, the NASDAQ’s year-over-year return is hovering around zero well below its usual range. This stagnant performance could significantly restrain any potential upside for Bitcoin in the months ahead.
Bitcoin's price recovery will be challenging even if the current correction stops now.
— ecoinometrics (@ecoinometrics) April 7, 2025
Historically, when the NASDAQ 100 falls below its long-term year-on-year average return, Bitcoin tends to grow more slowly. It also faces a higher risk of entering a severe correction.
The… pic.twitter.com/rS9mybeaeg
Tariffs and Inflation Add to Market Pressures
Besides stock market stagnation, new economic policies are adding pressure. The reintroduction of U.S. tariffs under the Trump administration is fueling inflation fears. Tariffs tend to raise prices for imported goods, which can drive up consumer costs.
Consequently, the dollar’s purchasing power may decline as wages fail to keep pace. This environment creates challenges for traditional assets like stocks, which are vulnerable to shrinking margins and weaker demand.
Bitcoin, while volatile, operates outside the fiat system. It’s not directly tied to consumer demand or corporate earnings. That gives it a unique advantage when inflation rises. Unlike fiat currencies, Bitcoin cannot be printed, and its supply remains capped. While that doesn’t shield it entirely from short-term dips, it provides a long-term hedge against inflation and currency devaluation.
Why Bitcoin Still Matters in a Volatile Economy
Additionally, with the U.S. budget deficit ballooning to $1.8 trillion, the risk of further money printing remains high. More dollars in circulation typically mean lower purchasing power.
Bitcoin’s limited supply and global liquidity make it a potential safeguard against this trend. It’s not about replacing cash or stocks, but about balancing risk in a shifting economy. As of press time, Bitcoin trades at $77,159.70, down over 2% in the last 24 hours.
