As of 2025, Bitcoin has continued its up-down rollercoaster ride. All the while, it looks more like a speculative tech stock than a new form of money. Market sentiment, driven by things including tariffs and macroeconomic worries, has been a huge driver of its performance. Indeed, Bitcoin was not ranked as one of the top 5 investment opportunities by the Motley Fool Stock Advisor. This decision occurred against the backdrop of continued debate about Bitcoin’s place in the new financial order and capacity to mitigate the U.S. national debt crisis.
Yet, since January 2024, the approval of spot Bitcoin exchange-traded funds (ETFs) have roiled the cryptocurrency markets to historic extremes. This shift has upended market incumbents’ typical competitive advantages and flushed new entrants into the market. Bitcoin is finding its way amidst these shifts. Analysts are constantly looking at its performance against other places that one could invest in, balancing its potential with market risk. The Fear & Greed Index, a key indicator of market sentiment, reflects the impact of external factors, such as tariff concerns, on investor behavior.
Tariffs Impact on Crypto Market Sentiment
Developed by CNN business, the Fear & Greed Index shows market sentiment from 0 (Extreme Fear) to 100 (Extreme Greed). It only briefly dropped under 20, for one day in March and one in April. This economic downturn was largely the result of mounting fears of what widespread tariffs might do to the global economy. These worries underscore the extent to which out-of-market economic policies can deeply affect investor sentiment in the crypto space.
Increasing tariffs only serves to inhibit market stability and increase financial market volatility, making investors more risk-averse. When investors become risk-averse, they tend to sell off all risky assets, even those perceived to have low risk. That applies to Bitcoin and other cryptocurrencies. The drop in the Fear & Greed Index highlights just how easily the crypto market reacts to macroeconomic conditions.
The introduction of spot Bitcoin ETFs in January 2024 was expected to stabilize Bitcoin's price by broadening its investor base. Bitcoin’s downturn shows that the market’s reaction to tariff fears shows that Bitcoin is still vulnerable to macroeconomic sentiment. This vulnerability calls into question its credence as a safe-haven asset in times of economic calamity.
Bitcoin's Performance vs. Traditional Investments
Investors and enthusiasts are eagerly watching to see how Bitcoin 2025 stacks up against other non-traditional investments. The Motley Fool Stock Advisor continues to recommend these old-school alternatives. Just take a look at the Motley Fool Stock Advisor’s total average return of 818%, which crushes the S&P 500’s paltry 156% return by a huge margin. This jarring disparity prompts us to ask if Bitcoin can really hold its own against the returns of longer proven, traditional investment approaches.
Although Bitcoin is capable of high returns, it comes with a much higher level of risk. Its volatility would make it look like an overhyped, expensive tech stock. This lack of predictability is what makes it a much riskier investment than the stocks they typically recommend in The Motley Fool Stock Advisor. As with any high-reward, high-risk investment, investors need to balance the upside opportunity with the downside risk.
6 Ethereum, the second most popular cryptocurrency behind Bitcoin, has had a rough year. It is down 53% year to date, and down 16% over just the last 30 days. Cryptocurrency performance is a mirror to the larger struggles many are presently facing in the crypto market writ large. These experiences hammer home the need for diversification and thoughtful investment allocation.
Bitcoin's Evolving Role in the Financial System
In the past, Bitcoin and other cryptocurrencies were heavily uncorrelated with large financial assets. Institutional investors are playing a bigger role in the market. Further, the introduction of new financial products such as Bitcoin ETFs has changed the overall picture. Second, Bitcoin is much more wrapped up with the traditional financial system now, meaning it’s more vulnerable to the macroeconomic environment.
Another possible future scenario would see Bitcoin reserves used to start paying down the federal government’s massive $37 trillion debt. While this theory might be more wishful thinking than anything else, it does indicate that cryptocurrencies like Bitcoin are increasingly being recognized as important financial assets. Now, the prospect of making a dent in the national debt with Bitcoin demonstrates its usefulness for the wider economic landscape.
In spite of all this volatility and the current market crash, Bitcoin is still an investment worth making, according to analysts like Dominic Basulto. Basulto, who is invested in Bitcoin and considers it a speculative asset with long-term potential, sees this new asset as one-of-a-kind. This new perspective adds another important consideration to the mix. It’s not the right investment for every investor—but it is an investment best suited to people comfortable taking on greater risk in pursuit of long-term returns.
