Trump’s Tariff War Reveals Cracks in Bitcoin’s ‘Digital Gold’ Story

Equity speculators, bondholders, and crypto traders remember it as the day a bold new trade regime hit screens and risk assets lurched lower.

Washington imposed a universal 10% levy on nearly all imports, combined with higher “reciprocal” tariffs on countries with large trade surpluses with the US. Some rates reached as high as 50%. Markets saw the move as a direct hit to global trade and corporate margins, and as another source of uncertainty for inflation and growth.

Stocks sold off, Treasury yields swung as investors weighed damage to the economy against the risk of higher prices, and the dollar index slipped as traders cut exposure to US assets. In the week of the speech, S&P 500 futures – a proxy for the US stock market – fell 9.1%, their worst weekly performance since the COVID-19 pandemic. Even gold slipped 2.5%. Bitcoin lost 4.9%; for an asset often marketed as “digital gold” or a hedge against political upheaval, moving so closely with US equities raised awkward questions for its most loyal advocates.

If tariffs threaten profits, raise uncertainty and shake bond markets, should Bitcoin behave like a hedge – or like another risk asset caught in the crossfire?

Bitcoin as high-beta equity

Selection of ten notable US tariff-related developments since 2 April 2025

Source: TradingView (BTC/USD on Coinbase, S&P 500 E-mini Futures (front-month) on CME, and Gold Futures (front-month) on COMEX). Price moves are within 24-hour windows centred on the announcement time.

To address that question, ten major US tariff-related developments from April onwards were selected, including Liberation Day, the start of universal 10% tariffs, the activation of higher country-specific rates, later schedule changes and legal rulings on Trump’s tariff powers.

Taken across those ten windows, the correlation between Bitcoin and S&P futures comes out at about 0.96, meaning when equities sold off on tariff headlines, Bitcoin almost always fell as well – and usually more dramatically. When equities rallied on pauses or clarifications, Bitcoin tended to bounce, too.

Gold had more muted movements. Its 24-hour changes in the same windows were positively, though less tightly linked to both assets, with correlations of roughly 0.7 to Bitcoin and to S&P futures, and generally smaller swings. In several cases, the precious metal slipped alongside risk assets rather than providing a clean hedge.

The Liberation Day window is an obvious starting point. Over the 24 hours around the speech, S&P futures fell 2.2%, Bitcoin dropped 3.7%, and gold declined 1.9%.

By early April, Bitcoin’s 90-day correlation with US equities was already elevated at about 0.84; during the Liberation Day window itself, the hourly correlation between the two assets jumped to 0.94.

On 10 Apr, Trump announced a 90-day pause on tariffs for many countries. All three assets rose: S&P futures gained 3.6%, gold advanced 2.0%, while Bitcoin lagged this time with a 1.5% rise. The direction was, again, the same.

Later in the year, developments unfolded as the US and its trade partners attempted to gain the upper hand. In each case, the cryptocurrency saw stronger dips and weaker gains.

For investors hoping Bitcoin might reliably conserve value when stocks (and gold) sink during policy shocks, this is an uncomfortable pattern. Both Treasury yields and the dollar index sank as investors poured into bonds and foreign currencies. Bond yields move inversely to price. Across the selected events, Bitcoin has been trading as an equity-like risk asset, not as digital bullion, adding another dent to Bitcoin’s digital gold narrative.

A longer view of correlation

The tariff episodes sit against a broader change in how Bitcoin trades. A 90-day rolling correlation between daily Bitcoin prices and S&P 500 futures from January 2023 to December 2025 shows the relationship often strengthening over time.

Bitcoin-S&P, Gold-S&P 90D correlation (Jan 2023 to Dec 2025)

In early 2023, Bitcoin’s correlation with the S&P 500 hovered around zero and occasionally dipped into negative territory, particularly during crypto-specific episodes when digital assets were moving on their own news. Through 2024 and the first half of 2025, the relationship moved firmly into positive territory, mainly oscillating between 0.6 and 0.9 before easing back during the autumn correction.

Gold, by contrast, has spent more time with low or negative correlation to equities, and when it has moved in the same direction, its link has generally been weaker than Bitcoin’s. From this angle, gold still looks like the more reliable equity hedge, even if it doesn’t always move as a textbook hedge on individual days.

Separately, gold prices have climbed sharply this year as central banks and institutions added to reserves, trimming dollar holdings in the process. That has unfolded among growing concerns over fiscal deficits and the future of the dollar’s status as the world’s reference currency. Trump himself has been open about favouring a weaker dollar to boost exports and ease the burden of America’s $38tn in gross national debt.

Prices through 2025

Both Bitcoin and S&P 500 futures climbed through the first half of this year, staging a strong rally into early summer before rolling over on a mix of concerns about fiscal policy and AI-bubble worries.

Bitcoin and S&P 500 Futures (Jan 2023 to Dec 2025)

Tariff announcements are only part of that picture, but they stand out. The April sell-off around Liberation Day and the introduction of the new levies marked the year’s first significant drawdown for US equities. Subsequent moves, including the activation of higher country-specific rates and later legal wrangling over Trump’s tariff authority, correspond to further jolts in the prices of both assets.

Gold, “digital gold,” and what’s next

Gold has been one of the best-performing major assets in recent years, rising 60% this year as investors sought insurance against inflation, fiscal slippage and geopolitical risk. Yet its day-to-day role is becoming more ambiguous.

On some days when tariff risk increased – for example, when an appeals court allowed the measures to stay in force in late May – bullion rose while Bitcoin and equities faltered, behaving more like a traditional hedge. On others, such as Liberation Day itself, it declined alongside risk assets.

That leaves the digital-gold narrative in an awkward place. If Bitcoin cannot reliably hedge against trade and policy uncertainty, and gold only sometimes does, then neither asset offers a real antidote to tariff-driven volatility.

For now, this year’s tariff events point to Bitcoin as an extension of equity risk rather than an escape from it.