Bitcoin Emerges As a Surprising Performer Amidst Market Rout

The ongoing market rout in response to U.S. tariff concerns, escalating trade wars, and geopolitical tensions creates challenges for investors

The ongoing market rout in response to U.S. tariff concerns, escalating trade wars, and geopolitical tensions creates challenges for investors seeking havens and opportunity. Bitcoin (BTC) emerged in the last week as a surprising performer, volatile and yet ultimately resilient during equity and bond drawdowns.

Those investors leery of direct investing into bitcoin but seeking exposure should consider the CoinShares Valkyrie Bitcoin Miners ETF (NYSE:WGMI). The actively managed fund provides pure-play exposure to bitcoin miners in North America.

The Devaluation of the Dollar and U.S. Tariffs

The U.S. dollar has been rapidly depreciating in recent months, hitting 20-month lows against a basket of currencies. This devaluation is partly due to the massive stimulus spending during the COVID-19 pandemic, which has led to a sharp rise in the U.S. national debt.

As the dollar depreciates, other currencies, such as the euro and the yen, tend to appreciate in value. This can create problems for U.S. exporters, who will find their goods becoming more expensive relative to foreign competitors.

In response to these concerns, U.S. President Donald Trump has threatened to impose tariffs on a vast range of goods imported from China and other countries. These tariffs are designed to raise the prices of U.S. consumers and businesses, which could lead to a decrease in demand for foreign goods.

Trump's administration has already imposed tariffs on $250 billion worth of Chinese goods, and is threatening to impose tariffs on an additional $1 trillion in goods if China does not agree to a trade deal. These tariffs are set to take effect on Sunday, April 14.

The administration is also planning to impose tariffs of 10% on all goods from Canada, Mexico, and the European Union, beginning on Monday, April 15. These tariffs would be in response to what the administration deems unfair trade practices by these countries.

The Trump administration has stated that the tariffs are necessary to protect U.S. jobs and to reduce the trade deficit. However, critics argue that the tariffs will ultimately harm the U.S. economy by raising prices for consumers and businesses, and leading to job losses.

The administration is also planning to impose tariffs of 10% on all goods from Canada, Mexico, and the European Union, beginning on Monday, April 15. These tariffs would be in response to what the administration deems unfair trade practices by these countries.

The Trump administration has stated that the tariffs are necessary to protect U.S. jobs and to reduce the trade deficit. However, critics argue that the tariffs will ultimately harm the U.S. economy by raising prices for consumers and businesses, and leading to job losses.

Bitcoin Price Today

The world's largest cryptocurrency is currently trading at $84,959 as of midday trading on Thursday, April 17. BTC dropped to lows near $75,000 on April 9.

Between April 1 and April 17, bitcoin's price has risen by nearly 2%.

The cryptocurrency has been known for its volatility, which could prove an attractive alternative for some investors as U.S. economic outlooks crumble. In an environment where the dollar is challenged, U.S. debt climbs, and global trade scrambles to establish a new regime, an investment case for bitcoin's decentralized approach to finance could hold appeal. On a more fundamental level, bitcoin could provide diversification should prices continue to diverge from equity performance.

"Bitcoin is consolidating at higher levels (and above where it was trading before Trump’s election win in November last year), and the structural groundwork—ranging from institutional infrastructure to sovereign-level interest—is being quietly laid," Bitfinex bitcoin and crypto exchange analysts explained in a note to Forbes.

CoinShares Valkyrie Bitcoin Miners ETF

For those investors seeking opportunity in bitcoin but leery of direct exposure, the CoinShares Valkyrie Bitcoin Miners ETF (NYSE:WGMI) could provide opportunity. The actively managed fund provides pure-play exposure to bitcoin miners in North America.

The fund doesn't invest directly in bitcoin. Rather, WGMI invests in companies who earn at least half their profits or revenue from bitcoin mining. It also invests in those companies providing hardware, software or services to bitcoin mining companies. Additionally, the strategy seeks companies that manufacture specialized chips used in bitcoin mining.

Bitcoin mining entails running mining computer rigs with specialized programs. These rigs use intense computations to validate transactions on the Bitcoin Network, a decentralized blockchain ledger. As miners validate transactions and solve computations, they create new blocks for the blockchain and are rewarded with newly minted bitcoin cryptocurrency as well as transaction fees.

Bitcoin has a finite amount of supply (21 million), with halving events approximately every four years. Each halving reduces the amount of bitcoin paid for creation of new blocks, cutting supply in half. This means that over time, bitcoin miners will earn less for mining