The World Uncertainty Index spiked to all-time highs in an extremely short timespan. As all assets seek direction, the index is now far above the 2020 pandemic levels.
While many assets held onto their gains from 2025, the Global Uncertainty Index has risen close to all-time highs.
The index for the USA, Europe, and the world average spiked above the levels from the spring of 2020, accounting for more conflicts and factors compared to the year of the Covid-19 pandemic.
The World Uncertainty Index for the USA rose steeply to an all-time record, based on reports from the past two years. | Source: Federal Reserve Bank of St. Louis.
The Index spiked heavily, surpassing the growth during previous crisis events, including 9/11, the 2008 subprime crisis, the Eurozone debt crisis, and the pandemic.
The US uncertainty index has grown even more dramatically, spiking to an all-time high based on events and factors counted from 2024-2025.
The index formation is relatively conservative and may not be a leading indicator. The metric is derived from text mining all country reports from the Economist Intelligence Unit, covering 143 countries. While the index is not a leading, but a lagging indicator, it still shows the stage of the market where all assets are seeking direction or behaving in ways not seen in previous markets.
Can crypto survive global uncertainty?
Crypto has been used for local crisis conditions, including the offsetting of hyperinflation in Venezuela and galloping inflation in Turkey. However, crypto has also fallen during world crisis events, with a sharp drop during the 2020 pandemic. For crypto assets, attempts have been made to create a similar volatility and uncertainty index, which showed a rise in risk in the past few years. Since crypto was more leveraged, the risk of loss was higher compared to the initial spot-based bull markets.
This time around, crypto is going through what looks like a usual drawdown. However, sentiment has shifted, and some of the enthusiasm from previous cycles is lacking.
In the short term, crypto assets have outperformed stock indexes or gold. Usually, crypto bull cycles coincide with overall positive market conditions and a strong economy. Crypto has behaved similarly to the tech sector, at least before the appearance of AI.
After the latest market downturn, even $BTC and blue-chip crypto showed they are not a suitable store of value. Companies and institutions built up treasuries, which are now underwater. $BTC is down over 32% in the year-to-date, while precious metals still lead. However, metals are also facing rapid and volatile price moves, not typical for traditional markets.
Will global sentiment recover?
In Europe, the uncertainty index is already on the decline. In the coming years, the index may reveal a regional split. US uncertainty and weakness may affect the crypto and tech market more strongly, as they are the source of liquidity through institutions and retail.
On the other hand, global demand for US equities has been strong in the past years. Ongoing uncertainty will define the flow of funds and the model of risk-taking.
At this time, $BTC and the crypto market are in waiting mode. Liquidity is still deployed through stablecoins, but clear directional bets and long positions are waiting for a better signal.
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