In the wake of a massive single-day selloff that erased over $1 trillion from US stock market value, Bitget CEO Gracy Chen has stated that this event is accelerating a global reassessment of macroeconomic risks. Chen argues this environment is revealing Bitcoin's evolving role, where it is starting to behave less like a pure risk-on speculative asset and more like a neutral, portfolio-level allocation choice.
The catalyst for the market turmoil is linked to President Donald Trump's second-term tariff agenda, which has reignited inflation fears and particularly impacted tech-heavy stocks. Since Trump's second inauguration, US markets have shed a staggering $9.6 trillion in value. The selloff has been broad, with roughly $17 trillion in market capitalization wiped from peak levels across major assets including the "Magnificent Seven" tech stocks (like Nvidia, Google, Microsoft), gold, silver, and Bitcoin.
Bitcoin's relative resilience is a key point of analysis. As of Friday morning, Bitcoin was trading around $66,500, down roughly 4% on the day. While it has fallen approximately 45% from its all-time high of $126,000 reached in early October, it is still outperforming major stock indices on a relative basis during this downturn. Chen highlighted that Bitcoin's drawdown has been smaller and its behavior "relatively robust" compared to previous episodes of risk aversion.
A critical factor in this stability, according to Chen, is the sharp reduction in derivatives leverage across the crypto market. "The overall leverage in the crypto market has significantly decreased, thereby limiting the scale of forced liquidations that typically amplify downward pressure during market stress," she explained. This contrasts with a previous 41-day period where $1.1 trillion was erased from digital assets amid intense leverage cascades.
The current adjustment is less about crypto-specific stress and more about global portfolios digesting a new regime characterized by higher energy prices, stickier inflation, and geopolitical conflict—specifically referencing the war in Iran—spilling over into capital allocation decisions. "This round of adjustment reflects that global markets are reassessing macro risks at a faster pace," Chen said. She added that as oil prices spike, "the impact of geopolitical changes is no longer limited to the energy market but is beginning to more directly affect global capital allocation."
The fallout has extended to crypto-related stocks, which were battered on Friday. Crypto exchange Coinbase (COIN) and digital asset conglomerate Galaxy (GLXY) dropped nearly 7%, while exchange Gemini (GEMI) slid almost 9%. Bitcoin-linked companies like MicroStrategy (MSTR) and miners including Riot Platforms (RIOT), CleanSpark (CLSK), and Hut 8 (HUT) posted losses between 5% and 8%.
Federal Reserve officials are navigating a complicated backdrop. Richmond Fed President Tom Barkin warned that higher gas costs could dent consumer spending, while Philadelphia Fed President Anna Paulson said the war in Iran created "new risks to both inflation and growth." This has shifted market expectations from anticipating rate cuts to considering the possibility of rate hikes, contributing to the risk-off sentiment.
Chen concludes that in an "increasingly fragmented macro environment," Bitcoin is being viewed by some portfolios as a more neutral allocation choice, with investors rotating between crypto, equities, and gold as they navigate policy shocks and rising recession odds.
