March brought significant volatility to Bitcoin. After starting the month trading around $90,000, Bitcoin experienced a series of sharp declines, dipping below $80,000 by mid-March. This 10% correction came amid mounting concerns about geopolitical tensions, aggressive US trade policies, and broader economic instability.
The volatility mirrored a broader risk-off sentiment, with global equity markets also sliding during this period. However, Bitcoin’s price recovered some ground toward the latter half of March, stabilizing between $82,000 and $85,000 as market anxieties cooled.
This turbulence significantly impacted the Coinbase Premium Index, which is widely used to gauge US investor sentiment. A positive premium indicates stronger US demand, while a negative premium suggests weaker demand relative to international markets. Throughout March 2025, the index remained predominantly negative, signaling lower US demand.
The Coinbase Premium Index tracks the difference in Bitcoin’s trading price on Coinbase versus other major exchanges such as Binance, Bitstamp, and OKX. Since Coinbase has a large US-based customer base, the index effectively measures the sentiment and behavior of American investors.
A rising premium often signals robust institutional or retail buying in the US, while a falling or negative premium suggests that domestic investors are offloading Bitcoin or demonstrating lower interest relative to their global counterparts.
In March 2025, the Coinbase Premium Index consistently showed a negative reading, with values frequently ranging from -3% to -6%. This persistent discount indicated that Bitcoin prices on Coinbase lagged behind those on international platforms, reflecting softer demand from US investors. The negative trend mirrors the significant macroeconomic developments in the United States, contributing to reduced risk appetite among domestic traders.
Graph showing the Coinbase Premium Index from March 1 to March 16, 2025 (Source: CryptoQuant)
Several US-specific factors were key in pushing the Coinbase Premium Index into negative territory throughout March. The Trump administration’s decision to impose 25% tariffs on Mexican and Canadian imports and a 10% tariff on Chinese goods introduced fresh uncertainty into financial markets.
These policies triggered concerns about rising costs for US businesses and consumers, dampening investor sentiment. As traditional markets sold off in response to these trade tensions, risk assets like Bitcoin experienced heightened volatility, leading US investors to reduce their exposure to speculative assets.
The S&P 500 and Nasdaq both entered correction territory in early March, falling more than 10% from their February highs. This sharp equity downturn likely prompted many investors to liquidate Bitcoin holdings to cover losses elsewhere or raise cash amid declining risk appetite. As a result, Coinbase prices trended lower relative to global platforms.
Despite the predominantly negative trend, the Coinbase Premium Index briefly spiked into positive territory on March 14–15, climbing from around +1% to +2%. This shift aligned with a short-lived stabilization in Bitcoin’s price after it found support around the $80,000 mark.
The Fed’s decision to maintain rates without signaling imminent hikes temporarily relieved financial markets. While broader concerns persisted, this perceived stability encouraged some US investors to resume dip-buying in risk assets like Bitcoin, temporarily driving Coinbase prices higher.
However, this positive momentum proved short-lived. By March 16, the index had returned to negative territory as macroeconomic uncertainty persisted.
The prolonged negative premium highlighted a risk-averse environment in which American investors were less willing to accumulate Bitcoin, especially amid escalating trade tensions, a volatile stock market, and stagnant monetary policy.
The brief premium spike in mid-March reflected a momentary shift in sentiment tied to improved short-term outlooks in financial markets. However, this optimism quickly faded with the broader macroeconomic backdrop remaining unstable. The data shows that while Bitcoin operates independently of traditional markets in some respects, it remains susceptible to economic and geopolitical developments — particularly in the US.
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