On April 6, Coindesk analyst Omkar Godbole stated that since Trump announced reciprocal tariffs on Wednesday, the Nasdaq has dropped 11%, but Bitcoin prices have remained largely stable, continuing to stay above $80,000, with Bitcoin's resilience seen as a sign of its gradual evolution into a macro hedging tool.
However, short-term violent downward fluctuations cannot be ruled out, especially due to the dramatic volatility in bond prices, with "bond market basis trading" facing significant risks. Basis trading involves highly leveraged hedge funds, reportedly with leverage ratios as high as 50 times, exploiting tiny price differences between Treasury futures and securities. In mid-March 2020, as the COVID-19 pandemic threatened the global economy, basis trading grew explosively, leading to a "cash grab" where investors sold almost all assets to obtain US dollar liquidity. On March 12, 2020, Bitcoin plummeted nearly 40%.
Therefore, the market needs to pay attention to Treasury yields. Increased volatility in bond yields could trigger a market crash similar to the COVID-19 period, causing widespread asset sell-offs, including Bitcoin, to obtain cash.
