Bitcoin's Recent Decline Isn't Just a Crypto Issue—It's Closely Following the Performance of Major Tech Stocks

Bitcoin's recent decline isn't just a crypto issue—it's closely following the performance of major tech stocks like Apple, Tesla, and Microsoft.

Bitcoin's recent price decline is closely linked to the performance of major tech stocks, which an economist at Standard Chartered has grouped together as the “Magnificent Seven plus Bitcoin.”

As the crypto market navigates a "risk-off" phase, investors are turning away from high-risk assets amid a bleak outlook and potential macroeconomic shifts.

Top Tech Stocks and Bitcoin in Close Knit Group

Geoff Kendrick, an economist at Standard Chartered, has been following a basket of seven large-cap tech stocks—Apple, Microsoft, Tesla, Nvidia, Meta, and Samsung—which he calls the Magnificent Seven, plus Bitcoin.

While Tesla has encountered difficulties, Meta and Apple have displayed greater resilience. However, the bulk of Bitcoin's price movements are being driven by broader market instability rather than internal crypto factors.

"The Magnificent Seven are all in deep bear markets, apart from Apple and Meta which have shown some resilience, while Tesla is struggling in particular. If the US administration manages to reach a last-minute deal to postpone the new trade tariffs on Canada, we might see a slight recovery in the stock market, which could also benefit Bitcoin."

Also Read: Best Crypto to Buy Guide: Explores Hottest Coins For March 2025

The Build-Up to a Potential Bitcoin Rebound

According to Kendrick, Bitcoin needs one of two things to start bouncing back: either stocks, especially tech, begin climbing again, or the Federal Reserve hints at cutting interest rates.

"A small possibility exists that we could witness a large move in Bitcoin if the Fed signals at its next meeting, in late April, that it is pivoting towards looser monetary policy—for instance, a rate cut in May. Currently, traders assign a 50% likelihood to such a scenario."

"A stronger hint of a rate cut or, even better, an actual cut at the meeting could be the spark that ignites a rapid rally in Bitcoin from the current price level of $76,500 to $69,000, in our view. Nevertheless, we remain optimistic about Bitcoin in the long term. Our forecasts indicate that Bitcoin could reach $200,000 by the end of 2025 if the Fed does begin to ease up."

The upcoming meeting of the Fed, scheduled for March 19, will be a crucial event to monitor as it could influence the trajectory of Bitcoin's price.

"The probability of the Fed keeping interest rates unchanged at its meeting later this month is 97%, which might disappoint investors and keep downward pressure on Bitcoin. In this scenario, we anticipate further price declines, potentially pushing Bitcoin to the $70,000 level. This downturn could also drag down other cryptocurrencies like Ethereum and Solana to some extent."

Trump’s Trade Tariffs Might Affect Bitcoin

Furthermore, the administration is planning to impose new trade tariffs, such as a 25% tax on all imports from Mexico and Canada, which is spooking the markets even more. This trade war could slow down economic growth and hurt riskier assets like stocks and crypto even more.

Some analysts believe that the administration’s hardline trade tactics are a deliberate gambit to pressure the Fed into cutting interest rates sooner. The theory is that the White House could spur the Fed to step in with rate relief by undermining market confidence and straining the economy.

"Interest-rate futures have shifted rapidly to reflect growing expectations of Fed easing. As of the beginning of the year, traders assigned a 46% probability to a rate cut by May. However, this probability has since soared to nearly 90% as of yesterday. This shift in sentiment suggests that markets are increasingly betting that the Fed will have to respond to mounting economic and geopolitical risks in the coming months."

After the Trump administration imposed a 10% tariff on a vast range of Chinese goods in September 2018, the S&P 500 experienced a decline of about 10% over the subsequent three months.

Despite the recent rally in the stock market, which has been driven in part by optimism over a trade truce between the U.S. and China, equity markets have struggled amid the current mix of Fed tightening and trade disputes.

For instance, the S&P 500’s gain since the start of Trump’s second term is much smaller than during the equivalent period of his first term, reflecting weaker investor confidence and growth concerns.

The World Bank has also expressed concern over the potential impact of tariffs on the global economy, stating that they could reduce global trade by up to 7% and output by 1.5%.

"The good news is that the administration might postpone the new trade tariffs if a last-minute deal is reached to keep the North American trade agreement after all, and if the U.S. manages to strike a new trade deal with China. In this scenario, we might see a slight recovery in