Bitcoin prices fell in early trading on Wednesday at news of U.S. economic contraction and weak private sector jobs data. However, the world’s largest cryptocurrency recovered a good portion of its losses by market close, as it continues to draw investor interest.
U.S. GDP shrank in the first quarter on a surge of imports as companies attempted to get ahead of tariffs. The economy declined 0.3%, the first contraction since 2022, as import/export imbalances and a drop in federal spending created notable drag. At the same time, ADP private sector jobs in April came in at 62,000, the lowest since July 2024 and significantly below estimates of 120,000, reported CNBC.
Markets slid on news of economic contraction, though the S&P 500 managed to eek out small gains by market close. The Nasdaq Composite and Russell 2000 fell 0.09% and 0.63% respectively, according to WSJ data. Bitcoin also slid in midmorning trading, falling slightly below $93,000 before recovering to $94,600 as of 6 p.m. EST.
The cryptocurrency crossed above $95,000 this week, as investors seek opportunity in an uncertain market environment. Some refer to bitcoin as “digital gold” and view it as an alternative safe haven asset. Rising correlations to gold and declining correlations to tech in recent weeks could lend credence to the perspective of bitcoin as a gold alternative.
See also: Cryptocurrencies: Bitcoin Rallies to Two-Month High
In a Challenging Economic Environment, Consider Bitcoin
For those who see opportunity in bitcoin prices looking ahead, whether as a safe haven in a declining dollar environment or from a pure alternatives perspective, the CoinShares Valkyrie Bitcoin Fund (BRRR ) is worth consideration. The fund provides exposure to bitcoin’s price movements with the ease of access through traditional brokerages. Through BRRR, investors can capture bitcoin price movements while avoiding many of the extra steps required with direct bitcoin investment, such as storage.
BRRR seeks to reflect the price performance of the CME CF Bitcoin Reference Rate – New York Variant, minus fees and expenses. This index uses the same six bitcoin exchanges as the CME CF Bitcoin Reference Rate, but calculates bitcoin’s price at New York Market close (4 p.m. ET).
The fund is a trust that passively holds bitcoin (meaning it’s physically backed). Shares held are tied to the value of the bitcoin held. It also is not an investment company, and therefore does not fall under the 1940 Act. The bitcoin held is custodied by Coinbase, BitGo, and Komainu, with private keys kept in cold storage. In other words, the means to access the bitcoin held by the custodians remains offline, disconnected from the internet. This provides an extra layer of protection from hacking.
BRRR carries management fees of 0.25%.
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