BTC Falls, Gold Futures Rise as Europe Threatens ‘Trade Bazooka’
BTC sharply on Monday amid worsening trade tensions between the US and Europe. This was due to President Donald Trump’s proposal of tariffs in talks over Greenland. The top cryptocurrency declined 3.6%, losing over $3,500 and trading below $93,000 on key platforms. This shows that investors are generally more cautious.
The collapse occurred at the identical time as more than $860 million in crypto holdings were over the last 24 hours. This included almost $750 million in long BTC positions that were wiped out in only four hours.
This volatility showed how sensitive is to large economic changes; in this climate, it behaves more like a high-beta tech stock than a secure-haven asset.
Trump’s Threat of Tariffs on Greenland Makes Things Worse
The market chaos was caused by President Trump’s statement over the weekend that begining February 1, excellents from eight European countries, Denmark, Sweden, France, Germany, the Netherlands, Finland, the United Kingdom, and Norway, would be subject to 10% tariffs.
The taxes would rise to 25% by June 1 unless the US and reach an agreement allowing the US to purchase Greenland, the mineral-rich Arctic territory that Denmark owns.
European officials have condemned the tariffs as economic coercion, which has once again flared tensions between Europe and the US. French President Emmanuel Macron asked the to use its Anti-Coercion Instrument, which is often called the “trade bazooka.”
This 2023 tool is intended to stop economic coercion by limiting access to EU markets, imposing export controls, or taking other steps. If diplomacy fails, the EU is also considering reinstating a €93 billion ($108 billion) package of retaliatory tariffs on American exports, which would affect everything from agriculture to industrial excellents.
What Analysts Think About How the Market Works
Analysts said that BTC’s fragileness was mostly due to fears of a trade war. Andri Fauzan Adziima, the research head at Bitrue, said, “I view Trump’s tariffs on Greenland making people worry about a trade war and making the markets less risky.”
BTC fell below $93,000 because of liquidations and , much like a tech stock. This shows how severely it is affected by major economic changes. There is still short-term hardship, but if the money fragileens, both could rise in the long term.
Jeff Mei, the chief operating officer at BTSE, said, “Traders are currently thinking about the worst-case scenario, in which markets could drop to levels viewn in April 2025.” If institutional investors think Trump’s warnings are real, they may try to de-risk their holdings once the US market opens.
Carsten Brzeski, the head of macro at ING, said that some European politicians are inclined to play hardball, at least based on the first reactions.”
