Bitcoin’s Price Stability Threatened by Potential Basis Trade Blowup

Bitcoin's stability amid recent Nasdaq declines has drawn attention to its potential as a haven asset. Key points include:

Nasdaq dropped 11% due to new tariffs, affecting global markets.
BTC traded above $80,000, indicating resilience during macroeconomic stress.
Institutional inflows could increase if market volatility continues.
Short-term downside volatility remains a risk due to the "Treasury market basis trade." This involves highly leveraged hedge funds that may face significant losses during market turbulence.
The size of this basis trade is currently $1 trillion, posing risks similar to those observed in March 2020 when BTC fell nearly 40%.
The MOVE index, which measures Treasury market volatility, recently increased by 12%, signaling heightened uncertainty.
A Brookings Institution paper suggests the Federal Reserve may need to support hedge funds during severe market conditions.

Market dynamics are evolving; investors should monitor potential volatility closely.