Wall Street’s Biggest Oops: S&P 500 More Chaotic Than Bitcoin?

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What to know:

  • Bitcoin’s volatility has been tamed a bit—who saw that coming? It’s now looking like a steady, low-risk option against the rollercoaster ride of stocks.
  • U.S. assets? Investors are bailing. That’s sending Treasury yields up and the dollar on a freefall.

Once upon a time, Wall Street had a good old laugh at Bitcoin (BTC), mocking its wild, unpredictable swings like a drunk uncle at a wedding. Fast forward a few years, and—surprise!—the volatility picture has flipped upside down. Apparently, the unpredictable antics of President Trump’s trade policies have made U.S. assets just as fun as riding a bike down a hill with no brakes.

Ever since Trump’s “Liberation Day” tariff announcement on April 2, the S&P 500—aka Wall Street’s favorite mood ring—has skyrocketed in volatility. In fact, it’s now up 169% on a seven-day basis, according to TradingView data. This marks the highest volatility since that delightful COVID-19 market crash of 2020. So, yeah, it’s been a wild ride.

Bitcoin, on the other hand, has had its seven-day realized volatility double to 83%, but it’s still not nearly as wild as the S&P 500. So, what does that mean? Well, Bitcoin’s becoming the reliable, low-risk cousin to the stock market’s unpredictable, thrill-seeking wild child. It’s like the tortoise beating the hare in a race, except, you know, way more dramatic and involving blockchain technology.

CoinShares’ James Butterfill posed the important question: should you trust assets that are swayed by political tantrums and human missteps? Or should you go with something rooted in a mathematically driven framework, immune to capricious decisions? It’s like choosing between a stable, well-behaved dog and a cat who knocks everything off your counter. Hmmm…

Investors Dump U.S. Assets Like They’re Hot Potato

The S&P 500 has lost 14% in just under two months—talk about a crash diet. Why? Oh, just some pesky trade war fears that turned out to be totally right on the money. The tech-heavy Nasdaq and Dow Jones aren’t looking too hot either, with their values dropping right alongside an explosion in global market chaos.

Historically, when things go sideways in the U.S. market, investors flock to Treasury notes like they’re a safety blanket. They also run to the dollar, which is supposed to be the world’s “reliable” currency. But, in a plot twist no one saw coming, investors have started tossing Treasury notes overboard, which is driving yields higher and the dollar into a nosedive.

Since last Friday, U.S. 10-year bond yields have surged by 62 basis points to 4.45%. And the dollar? It’s been playing a real-life game of limbo, sliding down to 100 on the dollar index—the lowest point since September. The dollar has truly been giving it its all, performing the financial equivalent of a faceplant.

Normally, when yields rise, currencies appreciate. But—plot twist—if investors start worrying about a country’s debt (looking at you, U.S.), they pull their money out, leading to rising yields and a sinking currency. You’ve seen it before in countries like Brazil and Argentina. Heck, even the UK tried this out during the Truss era. But for the U.S.? This is almost as rare as a unicorn at a dog park.

Evercore ISI pointed out this whole “higher yields, lower currency” thing as totally out of character for the U.S. Only four other times in the last 30 years have we seen the dollar tank with bond yields doing the opposite. What does this all mean? Well, it’s a sign of waning U.S. “exceptionalism”—a fancy way of saying the dollar isn’t as appealing as it used to be, thanks to a few too many questionable decisions.

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2025-04-11 08:57