On April 6-7, 2025, cryptocurrency markets and the stock market experienced significant fluctuations caused by a tariff war initiated by U.S. President Donald Trump. As a result, the S&P 500 index fell to its lowest level in 11 months, while the Japanese Nikkei index and the Chinese China A50 decreased by 8% and 6% respectively.
This is reported by Finway
Amid the decline of traditional financial indices, the stocks of cryptocurrency companies demonstrated considerable resilience. Ahead of the trading session on April 7, despite the stock market crash, the valuations of crypto firms remained stable.
Market Reaction to Economic Challenges
Donald Trump announced the introduction of new tariffs on April 2, 2025. Over the next two trading days, the market capitalization of companies within the S&P 500 index shrank by $5.4 trillion, and by the close of the session on Friday, it fell to $5.074 trillion, a level the market had not encountered since May 2024.
On April 3, the Magnificent 7 index, which includes the stocks of the seven largest American tech companies, dropped by 6%, and continued to decline on April 4. On average, the stocks of companies in this index fell by 5.85%, with Tesla shares decreasing by 10.42%, Nvidia by 7.36%, and Apple by 7.29%.
Resilience of Cryptocurrency Companies During Crisis
Amid significant declines in traditional markets, the stocks of the largest cryptocurrency companies showed positive dynamics. For instance, shares of Strategy (formerly MicroStrategy) traded in pre-market with an increase of over 4%. Positive dynamics were also observed in the stocks of miners MARA, CleanSpark, and Riot Platforms, which rose by 0.6%, 6.4%, and 0.28% respectively.
However, payment service providers like Coinbase and Robinhood suffered losses, declining by 5.2% and 13.2% respectively. Only Robinhood exceeded the depth of the stock market decline.
Meanwhile, Standard Chartered Bank conducted an experiment by including Bitcoin in the Magnificent 7 index instead of Tesla shares, which demonstrated greater efficiency and lower volatility.
“Despite the market crash caused by macroeconomic instability, crypto firms are showing resilience.”