Crypto traders brace for market volatility in the days ahead as US President Donald Trump is ramping up his campaign to strong-arm Denmark into surrendering control of Greenland.
The trepidation is reaching a fever pitch as Trump heads to Davos, Switzerland, for the annual gathering of global business and political elites where Washington’s deteriorating relationship with its closest allies has already become a hotly debated topic — one that investors are keeping a close eye on.
“The next few days will likely create a lot of volatility,” Matt Howells-Barby, VP of growth at crypto exchange Kraken, told DL News.
The geopolitical turbulence has driven Bitcoin down by almost 10% over the past week to trade near 89,000. The dip follows Trump’s threat to slam NATO allies with sweeping tariffs over control of Greenland and EU leaders’ vow to retaliate with the “trade Bazooka” anti-coercion tool.
Now, investors are ready to pounce on “any remarks hinting at further escalation or de-escalation surrounding EU-US tariffs,” Howells-Barby said.
Poor performance
Bitcoin’s poor price performance comes as the transatlantic tensions have triggered a broad “Sell America” trade where global investors dump US assets like stocks, bonds, and the dollar, to buy gold.
Short-term price action shows that Bitcoin behaves like a US risk asset, moving lock-step with the American market — and not the digital store-of-value investment many cryptocurrency zealots would prefer.
Investors dumped another $480 million in exchange traded funds backed by Bitcoin over the past week, DefiLlama data shows.
Investors are also selling off their shares in blue-chip US crypto companies. Tuesday’s top falls include Coinbase at 6%, Circle at 8%, Strategy at 8%, and Bitmine at 9%.
The S&P 500, the key benchmark for the $60 trillion US market, fell 2% on Tuesday in the worst selloff since October. The CBOE Volatility Index, Wall Street’s fear gauging tool, has spiked to its highest point this year.
Meanwhile, gold set yet another all-time high and is trading at $4,842 at time of reporting. Investors see the precious metal as a store-of-value amid debasing fiat currencies. Silver is also setting new records.
TACO trade
To be sure, there are plenty of investors leaning into the “TACO” trade, which is a tongue-in-cheek acronym for “Trump always chickens out.” The idea is that the US president always backs down on his threats and the world returns to a state of business-as-usual, like what happened between the US and China in 2025.
“The fact the pullback hasn’t been so severe leads me to believe that the market is potentially pricing in another TACO trade opportunity,” Howells-Barby said.
Still, many analysts see major downside for Bitcoin in 2026.
“My potential-loser radar is focused on Bitcoin,” Bloomberg Intelligence strategist Mike McGlone wrote on LinkedIn. He predicts $10,000 Bitcoin.
Crypto market movers
- Bitcoin is down 2.3% over the past 24 hours, trading at $89,182.
- Ethereum is down 4.6% past 24 hours at $2,964.
What we’re reading
- Investors in crypto exchange for Pokémon cards furious as they lose 98% of their investments — DL News
- Ethereum to $250,000? Price slides but Bitmine buys $100m worth of tokens — DL News
- Should You Buy Gold or Bitcoin? Here’s How to Think About It — Unchained
- Market breadth beats the Mag 7 — Milk Road
- Massachusetts to block Kalshi sports bets after judge’s ruling — DL News
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at lance@dlnews.com.
