Source: Cointelegraph
Original: “The Optimism in Cryptocurrency is Not Just Hype, but a Structural Feature”
Views from: CEX.io Founder and CEO Oleksandr Lutskevych
The Bitcoin market has consistently shown stronger psychological resilience than traditional stock markets during multiple global shocks. While some on Wall Street were “impressed” during the sell-off on “Liberation Day,” this optimism is not coincidental—it is a pattern in the digital asset space.
Let’s take a closer look at the dynamics of the Fear & Greed Index for cryptocurrencies and the stock market. After Donald Trump announced tariffs on almost all countries in April, the stock market Fear & Greed Index plummeted from 19 to 3, a drop of over 80%, hitting a three-year low. In contrast, the cryptocurrency Fear & Greed Index fell from 44 to 18, a decline of 59%.
Of course, these two indices are not entirely the same. CNN's stock market Fear & Greed Index tracks traditional market sentiment through signals such as VIX volatility, safe-haven demand, and market breadth. The cryptocurrency Fear & Greed Index, on the other hand, relies on price momentum, trading volume, and social sentiment indicators. Despite the different input data, both aim to measure the same thing: market sentiment.
When observed side by side during macro shocks, the emotional contrast between the two becomes apparent. When the macro environment cools, stock market investors tend to panic more and recover more slowly than cryptocurrency investors.
May 2022 provided a typical example. On May 4, the Federal Reserve raised interest rates from 0.5% to 1%, triggering concerns about an economic recession, which also affected the cryptocurrency market. Subsequently, from May 9 to 13, LUNA and UST collapsed. However, the stock market Fear & Greed Index dropped by 82% (to 4), while the cryptocurrency Fear & Greed Index fell by 62% (to 8).
Despite the cryptocurrency market already being under pressure and suffering a greater blow from the LUNA collapse—which led to the bankruptcy of several companies in the industry—the level of panic in the cryptocurrency market remained lower than in the stock market. However, since it was already in a bear market, the recovery time for the cryptocurrency market was longer.
Some may argue that the optimism in cryptocurrency is naive or irrational. But in reality, it is structural.
The inherent volatility of cryptocurrencies recalibrates investor expectations. In the stock market, a 20% pullback is considered a bear market. In the cryptocurrency market, this might just be a healthy correction. The scale and frequency of price fluctuations allow cryptocurrency enthusiasts to better withstand market shocks.
Additionally, there are cultural differences. The stock market is built by institutions for institutions, cautious and slow-moving. Cryptocurrency, on the other hand, was born out of rebellion and is driven by retail investors who quickly pivot to new narratives.
Nevertheless, the optimism in cryptocurrency is not entirely immune to erosion. As institutional influence grows and the correlation between Bitcoin and the stock market continues to rise, Wall Street's panic sentiment is increasingly seeping into the cryptocurrency space. During the tariff panic, the recovery times for sentiment in both the stock market and cryptocurrency were nearly identical, which may be a sign of optimism being eroded.
Even so, the optimism in cryptocurrency remains structurally solid.
Protecting the optimism in cryptocurrency are two dominant and distinctly different groups.
The first group is the “believers,” who see cryptocurrency as the future. Within this group, Bitcoin (BTC) adopters tend to view it as a store of value and a hedge. For them, short-term fluctuations are merely noise, distractions from a long-term vision. This perspective makes them long-term holders, unaffected by daily volatility.
Meanwhile, altcoin enthusiasts draw strength from rapid innovation. New protocols, narratives, and technologies keep the space in constant motion. The ability to self-reinvent and rebound reinforces the idea that cryptocurrency is an ecosystem defined by momentum rather than stagnation.
There is also a second group, primarily composed of recent entrants. They view cryptocurrency more as a speculative bet. This group includes many short-term holders who are more sensitive to news.
When panic spreads, this group often exits first, as indicated by the Binary CDD metric for short-term holders (STHs) showing more frequent peaks than long-term holders (LTHs). This group is also more susceptible to the erosion of optimism.
However, if this group is a minority, as in the Bitcoin market where long-term holders control over 65% of the BTC supply, then the impact of these macro-related panic sentiments on the market will be limited to the short term.
The believers' faith in a bright future is not based on blind faith but is grounded in solid foundations. In the case of Bitcoin, this foundation is built on a strong holder community, a fixed supply, and a clear, predictable monetary philosophy that stands out during times of economic uncertainty. These are not speculative claims but principles that have gained credibility over time.
Actions also support this optimism. During the market panic from March to April due to tariff issues, long-term Bitcoin holders accumulated over 300,000 BTC. Increased liquidity, with 1% market depth reaching $500 million at the end of the first quarter, indicates that market makers and investors continue to maintain confidence and participation.
Meanwhile, macro indicators such as global liquidity have reached new highs. Several Bitcoin cycle indicators, including the Pi Cycle Top, have yet to signal a top, reinforcing confidence that the market still has room to rise.
These are just a few factors driving optimism in cryptocurrency, and more will emerge in the future. This optimism is not temporary—it is embedded. While panic sentiment dominates the headlines, the cryptocurrency market continues to operate like a system preparing for a greater goal. And so far, history supports this view.
Views from: CEX.io Founder and CEO Oleksandr Lutskevych
This article is for general informational purposes only and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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