Bitcoin has two ‘favorable advantages’ in this market: Economist

Bitcoin’s managing to hold up, but a selloff could pave the way for an even more aggressive altcoin reaction

article-image

Dzhevaha/Shutterstock and Adobe modified by Blockworks

share

This is a segment from the Empire newsletter. To read full editions, subscribe.


Good news: The crypto market’s been holding up better than Kraken global economist Thomas Perfumo thought it would. 

He thinks the timing of the tariffs — while a total coincidence — is interesting for the crypto market, because it comes just as crypto nears the 12-month mark post-Bitcoin halving. In the past, this is when the cycle would have peaked. 

Obviously, we’re in uncharted waters here, and I’m not even talking about the macro environment. There’s plenty of evidence to suggest crypto’s either in the process of breaking out of its cyclical behavior, or has already broken it. 

But the impact we’re seeing is that folks — for the most part — are staying put instead of swapping out of bitcoin to chase the next big narrative.

“Everyone’s just kind of frozen and saying, ‘All right, I need a little bit more certainty around the medium term to even debate putting more money on the table anywhere,’” Perfumo explained. 

“Bitcoin…has two favorable advantages: One is this kind of historical presence as the store of value that people hunker back into, so it’s a defensible crypto asset. And then the second part is that it also has a deeper connection to capital flows from the traditional investment community through the ETFs.”

Now here’s the big thing: Because of this new mindset for bitcoin, any further pullbacks could have negative impacts on altcoins. 

Perfumo cautioned that further pullbacks could be on the horizon if bitcoin sells off more. With their higher beta, altcoins could then potentially see more aggressive selling.

For altcoins to really stage their comeback tour, he added, there’ll have to be some sort of catalyst that drives demand forward. Right now, that’s lacking, which is leading to folks taking risk off the table. 

The overall tone of our conversation was positive, with Perfumo noting that he was cautiously optimistic about the flows both in and out of the bitcoin ETFs. And while we may see crypto IPOs like Circle hit pause in the near term, he’s not expecting fallout from that. 

Outside of the public markets, I’ve heard takes from some venture capitalists. Basically, it’s a bit soon to gauge the impact that both the tariffs and macro environment may have on crypto investing. But the impact may only hit certain rounds — such as late stage versus early stage. 

Right now, crypto — as an industry —  seems to be protected despite its risky nature. But don’t count your blessings yet, because things could quickly change.

Proceed with caution.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

The goal, per Santiago Santos, is to make crypto a relatable piece of tech for people who may not even understand it

article-image

Stripe stablecoin unit aims to operate under a federal charter enabling regulated stablecoin issuance and custody services

by Blockworks /
article-image

Will TradFi make crypto better or create more problems than it solves?

article-image

Subtle decisions by risk curators saved Aave from significant turmoil

article-image

The new Rootstock Institutional unit aims to connect professional investors to Bitcoin-native yield and liquidity strategies anchored in BTC’s security layer

by Blockworks /
article-image

DOJ files record civil forfeiture against more than 127,000 BTC linked to scam activity

by Blockworks /