Why US Stock Market Swings Make Bitcoin Look Like a Safe Haven

Unprecedented Volatility in US Stocks

Up 9.5% one day, down 3.5% the next: Investors typically expect such oscillations from emerging markets or the notoriously volatile Bitcoin, but not from Corporate America.

Trump's Impact on Market Stability

President Donald Trump has disrupted the long-standing stability of the US market with his tariff policies, causing the US stock market to swing more wildly than both emerging markets and Bitcoin. In fact, a recent analysis indicated that the volatility of an ETF tracking the S&P 500 has outpaced that of a fund focused on emerging markets and even Bitcoin itself.

The Nature of Recent Market Movements

The dramatic moves in US stocks can be linked to the president's announcements regarding tariffs, which were subsequently modified. Generally, short-term US equity volatility does not exceed that of riskier assets unless driven by crises, such as the pandemic or other significant economic events.

Emerging Market Dynamics

Andrea DiCenso, co-portfolio manager at Loomis, Sayles & Company, remarked, "Are DM markets, specifically the US, acting a bit more like an EM market? I would say hands down, yes — that’s exactly what we’re seeing.” Recent mixed signals from the administration regarding tariff negotiations have contributed to this perception.

Bitcoin's Relative Stability

While Bitcoin's volatility has decreased since its early trading days, it remains over four times more volatile than US stocks. Recent data shows that the S&P 500 has experienced wider price swings than emerging-market stocks over the last two weeks.

Recent Market Performance

The S&P 500 recently recorded its worst weekly loss since the onset of the Covid-19 pandemic, yet is on track for nearly a 5% gain over the last week, driven by a 9.5% rally — its strongest in years.

Market Analyst Insights

Market analyst Neil Dutta from Renaissance Capital commented on the unusual trading patterns, likening the S&P 500 to a volatile meme cryptocurrency, stating, "UMMMM....The S&P500 trading like fartcoin is probably not a good thing."

As Eric Balchunas from Bloomberg Intelligence put it, "Since the tariffs became a thing, it has turned the S&P 500 into hot sauce. It’s almost like you don’t even need levered ETFs anymore — you can just trade the S&P.” Although this volatility will eventually subside, it highlights how rapidly market conditions can shift.